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MONOPOLIES 



THE PEOPLE. 



By D. C. cloud, 

MUSCATINE. 



THIRD, EDITION. 



"THE KNUXEftATION IM THE OONSTrnrnON, OF CERTAIN RIGHTS, SHALL NOT BK CON- 
9nUED TO DBNT OB DIBPABAOK OTHERS RKTAINED BY THE PEOPLE.'* 

"THE POWXBfl HOT ^DELEGATED TO THE UNITED STATES BY THE OONSTITrTION. NOR 

rmoHomD bt rr to the wtateb, are reserved to the states respectively, or to the 
rmotLKT^Artlda IX. and X. qf the QmtHtuUon qf the United States. 



DAVENPORT, IOWA: 
DAY, EGBERT, & FIDLAR; 

MUSCATINE, IOWA: 
_, ALLEN BROOMHALL, 
1878. 






^vt^-a-.-^ 



CO 



DEC 29 1887 






SoMfad aoootdiac to Act of Ooacraa. in th* y«u Un, 

Br D- C CUXID, 

la Ih* oae* of th* Ufemlaa of Oo^TCii. at WaAl^Um. 



\= 



'7 



TO THE 

WHO HAVE BBCX>MS THE PIONSSR CORPS IN THB BF9(Mm VKtHm 

MADE TO REFORM THE ABUSES NOW OPPRESSINQ THB COUNTRY, 

AND WHO ARE EARNESTLY AND EFFICIENTLY LABORING 

FOR THE RESTORATION OF THB RIGHTS OF THE 

PEOPLE, WITH THB HOPE THAT IT MAY AID 

THBM IN THEIR PATRIOTIC WORE, THIS 

BOOK 18 RESPECTFULLY DEDICATED 

BY 

THE AUTHOR. 



PREFACE. 



TO THE READER. 

F>R two years past the author has awaited the auspicious 
moment for presenting to the public his views upon 
the oppressions and abuses practiced by corporations and 
combinations of men who are apparently getting a con- 
trolling influence over the commerce, finances, and govern- 
ment of the contry. Recent action on the part of the peo- 
ple has convinced him that his opportunity has come, and 
he embraces it He has aimed to present a true history of 
the operations of the difierent monopolies. 

Since he began the preparation of his work, some events 
have taken place not noticed by him. Oakes Ames and 
James Brooks, two prominent characters among railroad 
men, and whom he has had occasion to name, have died. 
Some changes in the laws of congress have been made 
affecting the interests of corporations. The law requiring 
the secretary of the treasury to retain but one-half of the 
earnings firom the government of the Pacific roads to apply 
on the interest due to government on subsidy bonds, has 
been repealed, and he may now retain and apply the whole 
amount Suit has also been brought against the Union 
Pacific company because of its dishonest practices. 

On the whole, however, combinations of corporations, 
and other rings and organizations, at war with the best 
interests of the people, have acquired new strength and 
more power within the last few months. 

The reader will notice the fact, that while the avx^iXiOT 



VI PRBFAOB. 

has quoted liberally from the statutes and resolves of con- 
gress to show the great privileges and powers conferred 
upon railroad companies, and familiarized the reader with 
their financial and other transactions for a clear under- 
standing of their manner of doing business, he has not 
pretended to give a full history; satisfying himself with 
such chapters as would place before the public the true 
character of these monopolies. 

The author has sought to present truthful statements of 
matters in connection with the various interests now so 
hostile to the rights of the people, and he believes he has 
embodied the facts as they exist. 

D. C. C. 

Muscatine, Iowa, July 28, 1873. 



Since the publication of former editions of this work some 
additions have been made to the chapter on banking; on the 
legal tender decisions; on the control of railroad corpor- 
ations ; on water transportation, and a chapter added to the 
appendix on the financial policy of the government, as illus- 
trated by the present crisis in monetary aflairs. Of other 
changes introduced, an index has been prepared, a superior 
quality of paper is used, and the work is stereotyped. 

The book is now presented to the public in the enlarged 
and improved form, with the hope that the efforts of the 
author and publishers to aid in reforming the abuses under 
which the country is suffering may be appreciated. 

D. C. C. 
September 26, 1878. 



TABLE OF CONTENTS. 



CHAPTER L 

PAOES. 

A Preliminary Survey, . . . 15-18 

CHAPTER IL 
The Pacific Railroad Iniquity, . 19-28 

CHAPTER HL 
The Monopolists "Help Themselves," . 29-89 

CHAPTER IV. 
How Congress Betrayed the People, . 40-48 

CHAPTER V. 
Congress Become a Stock Excahnge, . . 49-56 

CHAPTER VI. 

How the Land Grant Railroads "Develope" 

A Country, 67-64 

CHAPTER Vn. 

The Credit Mobilier and a Villainous Con- 
tract, 65-82 



VI TABLE OP CONTENTS. 

CHAPTER Vm. 

Has Congress the Power, under the Consti- 
tution, TO Create or Endow Private Cor- 
porations? 83-93 

CHAPTER IX. 
State Rights at the Bar of a Corrupt Congress, 94 - 100 

CHAPTER X. 
An Unsettled Account — A Guilty Directory, 101 - 107 

CHAPTER XI. 

Sole Purposes OF Taxation, . . 108-113 

CHAPTER Xn. 

The Right op Eminent Domain — Unconstitu- 
tionality OP Municipal Aid to Railroads, 114-124 

CHAPTER Xm. 



I ( 



The Fatal Policy op Mortgaging Cities and 
Counties por the Construction of Rail- 
roads, 126-181 

CHAPTER XIV. 

The Impoverishing Transportation System — 

The Warehouse Conspiracy, 132-189 

CHAPTER XV. 

A New and False Principle in Hydraulics — 
Watered Stock — Its Unlawful Profits 
THE Source^ OP Extortionate} Tariffs — 
The Fast Dispatch Swindle, 140-148 



TABLE OF CONTENTS. VU 



CHAPTER XVI. 



A Privileged Class — The Monopolists Re- 
lieved OF THE Burdens of Taxation — An 
Outrage upon Republican Government, 149-158 

CHAPTER XVn. 

The Strong Grasp of Consolidated Capital 
UPON American Legislation — Bebchbr on 
" Reformation or Revolution" — History 
OF Railway Legislation IN Iowa, . . 164-170 

CHAPTER XVIIL 

The " Trail of the Serpent " in the Interior 

Department, 171-181 

CHAPTER XIX. 

The Monopolists at the Door of the White 

House, 182-187 

CHAPTER XX. 

The United States Treasury the Vassal of 
Wall Street — Stock "Operations" Ex- 
plained, 188-199 

CHAPTER XXI. 

How Wall Street Builds Railroads — A Hot- 
Bed OF Corruption, .... 200-204 

CHAPTER XXH. 

The Supreme Bench Invaded — Its Decisions 

Reviewed, 205-^^^ 



Tin TABLK OF CONTENTS* 

CHAPTER XXm. 

Bafk Monopolists — Their Conteol of xai 
Currency — A Bankrupt Finanoul Pol* 
icy, ,....., 

OHAPTEB XXIV. 

OtJR Tariff Policy — Does '* Protbction '* 
pROTiot? 



CHAPTER XXV. 
Patent Biqhts, and Their Abuses, 

CONCLUSION, 

Rkfobmation oe Kb volution — A Radical 
Changb Demandkd in tek Administration 
of Public Affairs — CoNCLtreiONs or the 
Author, ,..,., 



226«238 



239-247 



248-2S4 



255-854 



CHAPTER L 
LiaAL Tkndkr OBCiBmNS, , . , . 35T 

CHAPTER H 
DideiNfiNa Opinion of Chief Justice Chasb^ 358- $74 

CHAPTER m, 
l)iS8iNTiN0 Opinion of Justice Clifford, . 375^416] 

CHAPTER rV. 
DiBSiNTiNo Opinion of Jr?^TicK Fikld, . 417-461 , 



TABLE OF CONTENTS. IX 

CHAPTER V. 

GtoVERNMSNT CONTROL OF RAILROADS, 462-485 

CHAPTER VI. 

The Influence of Monopolies upon Labor, . 486-494 ^ 

CHAPTER Vn. 

The Financial Policy of the Government 

Practically Developed, 495-514 



ERRATA. 



Page 230, nineteenth line from top, for " twelve " read «tx. 
3M, seventh line ftom top, for " arrest " read virttl. 

346, seventh line from bottom, for " in " read U. 

347. in eighth ajid tenth lines fh>m top, for " imports " read impoitn. 
350, second line ftom top for "it" read ihey. 



MONOPOLIES 



— AKD- 



THE PEOPLE. 



INTRODUCTORY CHAPTER. 

IN treating of the topics disctlBged in this work the anther 
addresses himself to the task with no partisan bias. His 
purpose is to draw aside the veil, and let the facts speak for 
themselves. He writes, as he believes, in the performance of 
duty. Serious^dangers are threatening the people. There is 
a power in the land, possessing elements destructive not only 
of the industrial and producing public, but of the very form 
and spirit of republican government. It will be the aim of 
the author to show forth the progress and present attitude of 
this power in its relations with the people; and to suggest, if 
not to advocate, such measures of relief and protection as the 
exigency demands. 

^ It is a fact to be admitted by every candid thinker, that of 
late years, corporations, rings, and single speculators have, by 
united and persistent efforts, obtained control of the govern- 
ment; that their interests are guarded, and protected by the 
legislative, execntive, and judicial. departments of the govern- 
ment, l)Otli state and national. 

The men who are thus combined in opposition to the people 
do not bclontr to any one pfilitical division; tlioy an* !<» 
all parties; they are tirmly united for the pnrpose of gnt.-ping 
power, of controlling the government in their own interest, of 



10 MONOIX>LIE8 AND THE PKOl'LK. 

fiiBtening upon the people oppressive monopolies, and of enrich- 
ing themselves at the expense of the public. To accomplish 
these ends they procure donations of land, money subsidies, 
protective tariffs, continue a depreciated currency, and by arbi- 
trary rules and by-laws of their own hold the whole people at 
their mercy. To such an extent have these monopolies been 
fostered and protected that at the present time the farmer pays 
in freights, taxes, and duties, at least one-half of liis farm pro- 
ducts for their support. 

A silent or passive acquiescence in, and submission to, these 
abuses wd oppressions, have given a controlling strength and 
power to monopolies that cannot now be overcome without a 
united, long, and hard struggle. 

These evils cannot he corrected, nor the rights of the people 
restored, save by concerted action on their part, not only in 
securing proper legislation, but in asserting and maintaining 
in their business, at elections, and in the courts, their rights a^ 
free and independent citizens of the United States. The taxing 
of the people for the purpose of aiding private enterprises, the 
donation of the public land or of the public money U^ indi 
viduals or companies, or the enactment of laws by whicli the 
people are compelled to pay a. part of their hard -earned sub 
stance to aid private parties in accumulating wealth, are op- 
pressions not to be tolerated in a republic. Yet it is true that 
we are now taxed for the purpose of paying the interest on 
many millions of money given or loaned to railroad corpora- 
tions, that we pay large duties on goods for the benefit of 
wealthy manufacturers, that extortionate rates are exacted 
for transportation of products to market, that we are taxed to 
build railroads for private oi^Tiers, and these things are all 
pronounced legal and constitutional — not because they are so, 
but because these private interests have become so powerfiil 
that they control the country. The antiqtuited idea that the 
government was instituted by the people, and for the people, 
has become entirely obsolete, and the new doctrine has ob- 
tained that the whole duty of the government is to foster, 
protect, and support monopolies, and that these monopolies 
own the people. 



IWTEODTJCnORY CHAPTER, 11 

In no country of the civilized world are the people more 
directly connected with all the questions aflfecting their well- 
being than they are in the United States. It follows that all 
should be familiar with such measures as tend to fix and establish 
the general policy of the government — ^not only in respect to its 
general administration, but especially in those matters that 
directly or indirectly give to corporations, associations, compa- 
nies, or individuals, exclusive grants, donations or privileges, 
detrimental to the interests of those who are not of the " favored 
few." 

A republican government can only! exist when it is con- 
trolled by the people, and administered in their interest 
When special or class legislation, for the benefit of certain 
limited interests, or in favor of certain parties, becomes the 
role of action in the administration of either the state or 
national government, accompanied by grants of land, mone^, 
or taxes, to b^ returned to the government by levies made upon . 
the people without their consent, that government ceases to be 
republican. 

In our country, with its vast extent of territory, its diverse 
interests, and variety of products and manufactures, it is but 
natural for difierent localities and interests to ask governmental 
aid; nor is it always an abuse of power for the government to 
give this aid. In some instances it is the duty of the govern- 
ment to use its power and the public money in matters that in 
some degree, at least, are in their nature local — such, for 
instance, as the improvement of rivers, harbors, etc. In these 
cases it is not an abuse of power, but a legitimate exercise of 
the delegated authority for the benefit of the people. 

But there is another species of legislation, approved by the 
executive and judicial departments of the general government, 
and endorsed and supported by the legislatures and courts of 
many of our States, that is, in its operation, anti-republican 
and oppressive to the people. We refer to the current special 
legislation in favor of railroad corporations, our protective 
tariff, and the banking system, and financial policy of the 
government. 

No one wiU accuse the author of indulging m a i|^«t\i%ui 



12 MONOPOLIBB Aim THE FBOPLE. 

tietr of these matters. The history of our eonntry shows that 
men of all parties have songht for and obtained special grants 
nd privileges. Our aim is to direct the attention of flie re^^ 
to some of the facts connected with, and resulting from, special 
legislation on the above named subjects, and show their effect 
Qpon the people generally. 

Thg assertion that the government is now committed to the 
policy of donating the public lands to railroad corporations 
Inay be thought untrue, yet if we look through the acts of 
congress for the last few years we will find that more than two 
hundred million acres have been donated to such corporations, 
and from the number of bills asking for further grants intro- 
duced during the last congress these donations have but just 
begun. It will not be claimed that the people asked for these 
grants, or that the necessities of the government demanded 
them. Nor will it be contended that the people derive any 
direct benefit from them. On the contrary, the lands and the 
roads are owned and controlled by private corporations, and 
not even the government can use these roads for purposes of 
transportation without compensation. Now, these lands d( 
not belong to the government, but to the people. Those per 
sons filling the different departments of government are but 
the agents or servants of the people, and have no more right 
to give the public lands to railroad corporations than to tax 
the people and donate the money received as taxes to these 
companies. The policy is bad and oppressive in its effects. If 
one owns lands and employs an agent to sell it at a given price 
per acre, this agent has no right to convey one-half of it to 
himself and friends, and mark up the remaining half to a 
double price, and leave it on the owner's hands. This is what 
congress has done with the public lands, and in every instance 
the grants or donations have been, made to aid monopolies, 
corporations, and powerftil companies, who disregard the inter- 
ests of the public, and use their power and these immense 
gifts for the purpose of securing further grants by corrupting 
legislators, judges, and executive o£Scers. If we scale their 
efforts at corruption by their apparent success, they have not 
always failed. The interests of these monopolies are adverse 



to ibom of the people The priTileges granted them are taken 
&om the people. The wealth of the nation, held by the goir. 
eminent in troflt ibr the people, has been and is now being 
miaapplied by the people's trustees, and given to these anti« 
r^Hciblican monopolies, and unless something is done to arrest 
this species of dishonest and unconstitutional legislation, it is 
only a question of time, and that time not distant, when this 
government, called republican, will deny to the common peo- 
ple those tmalienable rights guaranteed to them by the consti- 
tation. How is it now? Discriminations are made against 
the public in favor of these monopolies in payment of taxes, 
in special l^islation for their benefit, and the aid and protee- 
tion afforded them by the courts. 

Corporations and joint stock companies should have such 
legislation and judicial aid afforded them as is necessary to give 
them a ]^al being, and place them on an equal plane with 
individuals, and no more. All privileges, immunities, and 
favors granted to them, beyond such as are necessary for the 
above enumerated purposes, are in conflict with the spirit and 
genius of our government. The granting of exclusive privileges 
to individuals or companies tends to build up an aristocracy 
of wealth, to array capital against labor, and to divide the 
people into classes. While we have no titled aristocracy in 
this country, under the fostering care of the government an 
aristocracy of wealth has sprung up among us more despotic 
in its nature than exists in the old world. It holds in its grasp 
the labor of the country ; it compels the whole people to pay 
tribute to it ; it is constantly asking, claiming, and receiving 
additional strength at the expense of the people. So great has 
its power become throughout the country as to alarm all who 
have considered the subject For the purpose of sell-protec- 
tion, the laboring community throughout the country are 
banding together to resist this monopoly. The Patrons of 
Husbandry are moving in the same direction, all feeling 
aaaured that no time must be lost, and that the welfSEu*e of the 
country, the perpetuity of our free institutions, and the 
privilege of owning and enjoying the fruits of thrift and labor, 



14 MONOPOLIES AND THB PEOPLE. 

without giving at least one-half of them to support these 
monopolies, demand prompt, united, and efficient action. 

We propose discussing the different matter referred to in the 
following order : — 

I. Donations of land and government subsidies, and their 
effect upon the people and the country. 

n. The oppressions practiced, and unjust discriminations 
made by railroad companies in the transportation, shipping, 
and storage of freights. 

III. The unjust system of taxation and discrimination 
made by legislatures and congress in favor of railroad com- 
panies. 

IV. The financial policy of the government, and the aid 
afforded by it to corporations and monopolies. 

V. The tendency of the courts of the country to uphold 
q)ecial or class legislatic^n in favor of monopolies and corpora- 
tions, at the sacrifice of the interests and rights of the people. 

YI. The banking system of the country with its useless 
burdens imposed upon the public. 

VII. The policy of protective tariff, and its effect upon the 
people and the interests of the country. 

VIII. The evils incident to the patent laws of the country. 

IX. The author will present his views respecting the 
means to be used for redressing the grievances considered by 
him. 

• In treating of these different subjects, it will be our design 
to cite and quote such acts of congress, of the state legislatures, 
and decisions of the courts as will sustain the views presented, 
in order that the reader may fully understand how these giant 
monopolies are in fact aided and supported by the government; 
and we shall try to demonstrate that the only way to arrest 
and correct these evils is by united and persistent action on 
the part of the industrial and farming communities, and that 
the remedy for all improper legislation for, and governmental 
aid to, these monopolies is in the hands and under the oontrol 
of the people. 



CHAPTER I. 



A PBELDONABY SDBVET. 



TOOTHING in this oonntiy has oontaibated bo mnch to the 
i. 1 subversion of our republican institutions as Land Grants, 
made by congress to railroad corporations, and congressional 
legislation in their favor. The policy has opened a wide field 
for reckless speculation and corrupt legislation. It has reversed 
the old rule, that '^ the people are sovereign," and has given to 
** the favored few " the absolute control of the nation. The 
reckless giving of lands to railroad corporations, by congress, 
is without excuse, or even apology. When grants were first 
made to states, it was pretended that railroads could not be built 
without this aid. Subsequent developments exploded this 
idea. Take Iowa as an example : In 1856 four leading rail- 
roads crossing the state from east to west, received grants of 
lands sufficient to pay at least one-half of the entire cost of 
their construction across the state, yet they were not built 
until long years after the grants were made, nor were they 
oonstrac:ted as rapidly as roads built exclusively by private 
enterprise and private capital. The effect of the grants was 
to retard the settlement and development of the wealth and 
resources of the state, by demanding from those who wished to 
settle upon the lands so granted, an extortionate, or at least a 
greatiy appreciated price therefor. It does not require a great 
stretch of the imagination to arrive at the conclusion that but 
for these grants the population and wealth of Iowa (the taxable 
wealth) would be quite one-fourth greater now. The grant of 
lands to certain railroad companies in Iowa reach eight 
thousand acres per mile; this, at $1.25 per acre, amounts to 
$10,000 per mile; much more than one-half of the actual 
entire cost of their construction. Yet, as a matter-of-fitct, 

(15) 



16 MONOFOLDOS AND THK PEOPLE. 

some, if not all, of them became insolvent, and either before, 
or Boon after their completion, their roads were sold to other 
parties — the original companies becoming bankrupt. But 
while the companies became bankrupt, the officers and few 
stockholders who controlled the corporation retired with im- 
mense wealth. These are th^ itien #ho, at the inception of 
the land grant system of building railroads, inaugurated the 
theory which has since been practiced, that all lands thus 
granted were to be treated as donations to the men who con- 
trblled the roads receiving the grants. The result has been 
doBoralizing. It has opened a field to adventurers, stock 
jobbers, and unscrupulous men, who have gone to the national 
capital and organized themselves into squads, rings, and com- 
panies, for the purpose of robbing the people. Not unfre- 
quently the men elected by the people to look after their 
interests in congress, have themselves become leaders and 
partners in these raids upon the public treasurer; and sc 
powerftil are these organizations that all the departments ol 
government have yielded to them, and the rule, with but fe^ 
exceptions, is, to plunder the treasury upon all occasions, and 
for every conceivable object. But as these matters will be 
treated in detail in the following pages, we dismiss them for 
the present 

The rule has been, with few exceptions, in granting lands, 
to provide that the railroad company shall select aJtemate 
seutions; that the residue shall be for sale at $2.50 per acre; 
that it shall not be subject to settlement under the pre-emption 
or homestead law. By these provisions, those persons who 
enter the remaining alternate sections, pay back to government 
the value of the lands donated to the railroad company. This 
plan of aiding monopolies is at variance with eveiy principal 
of right and justice. The people themselves are the govern- 
ing power. They are the government. Those who fill the 
various offices are not rulers, but agents and servants of the 
people. The public lands are the property of the people, and 
these agents or servants representing them in congress have 
BO more right to give these lands to corporations than to vote 
a part of each citizen's private fortune to the same corporationa. 



▲ FBSLDCINAK7 SDXVKT. VI 

^^eoj in addition to these grants, embracing .territoij aigh^^ 
^^ t«n times larger than the state of Iowa, large subsidies of 
^OQej are abo voted to accompany the lands, the people 
^liould become alarmed, and, if possible, arrest such abuses. 

Every acre of land given to railroad companies is a direct 
^bbery« of the people, and the fact that whenever a grant is 
tuade the people are required to make good the amount taken 
fix>m them by paying a double price for the moiety that is left 
to them, but adds insult to injury. The citizen who wishes 
to live upon and improve his quarter section, instead of claim- 
ing it as a homestead, or even purchasing it at the government 
price of $1.25 per acre, must pay $2.50 per acre before he will 
be permitted to occupy it Nor is this all; he must be taxed 
to pay the interest on the subsidy bonds issued to the same 
companies that have received the grants of land, and all the 
benefit he derives from these unjust burdens imposed upon 
him, is the privilege of traveling upon railroads, or of ship- 
ping his produce over them, after he has paid to their officers 
whatever sum they choose to demand for the privilege. 

To show more fully the extent to which the people are be- 
ing plundered under the plea of assisting railroads in their 
efforts to develop the country, we desire to direct the reader's 
attention to some of the acts of congress covering " railroad 
legislation." Let us, for an example, take the Union and 
Central Pacific railroad, beginning at Council Blufis and ter- 
minating at San Francisco. The charter for this road was 
granted in 1862, at a time when the country was at war; when 
it would be natural to presume that the government had no 
surplus capital, and when reason and conmion prudence de- 
manded strict integrity and rigid economy in eveiy depart- 
ment. In chartering tiie company, all idea of economy, integ- 
rity, or even conmion honesty seeijis to have been abandoned. 
The demand for the road as a national necessity in time of 
war, for direct communication between the Atlantic and Pa- 
cific States, and the immense cost of the road, with its great 
length, were the arguments used in favor of liberal aid. All 
these reasons were plausible — perhaps valid. They were seized 
upon, and the action of congress besought in the premises bj 



18 MONOFOLIBB USm THE FBOFLX. 

a rimg that was formed for the purpose of making immense 
fortunes out of the enterprise. A noticeable feature in the 
matter is, that members of congress, in the senate and house, 
as soon as the act was passed granting the charter became 
large stockholders and managers in the corporations. The 
aid granted by congress to this company was suflSdent, if 
honestly applied, to construct a double track road the entire 
distance, and leave a large margin for distribution among the 
stockholders. The act of congress granting the charter, with 
subsequent amendments, opened a wide field for plunder, and 
the way the corporators availed themselves of their opportu- 
nity shows that they had determined to plunder the people of 
the last available dollar. A reference to this act and amend- 
ments, as published by congress, will fully sustain all we have 
asserted. Selecting the charter of this road as an apt illustra- 
tion of all others receiving aid from the government, we ask 
the reader's attention to some of its more remarkable features. 



CHAPTER IL 

THX PAGIFIO BAn.ROAD IHig i UlTl . 

ON the first day of Jnly, A. D. 1862, the charter of the 
Union Pacific raikoad was passed. It contains, among 
others, the following provisions, to- wit: 

^^ SscnoN 2. That the right of way through the public lands 
be, and the same is hereby, granted to said company for the 
construction of said railroad and telegraph line, and the right, 
power and authority, are hereby given to said company to take 
from the public lands adjacent to the line of said road, earth, 
stone, timber, and other materials, for the construction thereof. 
Said right of way is granted to said railroad to the extent of 
two hundred feet in width on each side of said railroad, where 
it may pass over the public lands, including aU necessary grounds 
for stations, buildings, workshops, and depots, machine shops, 
switches, side tracks, turn-tables, and water stations." 

The right of way was reduced to one hundred feet for each 
side of the railroad, by act of congress of July 2, 1864, and 
the right to take material for the construction of the road was 
limited to ten miles on each side thereof, by the same act. 
By this section the company is allowed to take from the pub- 
lic lands all the material needed in the construction of the road; 
to strip the lands and leave them naked for the peopla The 
real value of the lands is given to the company; the refuse left 
for the American people. 

A part of the third section reads as follows: 

^^ That there be, and is hereby, granted to the said company, 
for the purpose of aiding in the construction of said railroad 
and telegraph line, and to secure the safe and speedy transport- 
ation of the mails, troops, munitions of war, and public stores 
thereon, every alternate section of land, designated by odd 
numbers, to die amoimt of five alternate sectiopa per mile, on 

OB) 



90 MONOFOUBS ASD THB FBOFLB. 

each side of said road, on the line thereof, and within the lim- 
its of ten miles on each side of said road, not sold, reserved, or 
otherwise disposed of, by the United States, and to which a 
pre-emption or homestead lien may not have attached at the 
time the line of said road is definitelj fixed. Provided, that 
all mineral lands shall be exempted from the operation of this 
act; but when it shall contain timber, the timber is hereby 
granted to said company." 

By the act of congress, of July 2, 1864, this act was so 
amended as to grant ten alternate sections on each side of the 
road, and to grant to the company the iron and coal found 
within ten miles of the road. The reader will notice the rea- 
sons given for this grant. Ist. To aid in the construction of 
the road; a legitimate reason. 2d. To seov/re the 6afe a/nd 
speedy trcmsportation of the mml^ troops^ mimiUona ofvactr^ 
etc Twenty sections of land per mile are given to the com- 
pany for the purpose of securing the safe and speedy transporta- 
tion of troops, and above enumerated articles. It has been 
said that a poor reason is better than no reason. Of all poor 
reasons given for an act, this appears to be one of the weakest. 
The r^er will not be able to discover its force. As we pro- 
gress, we will find that from its inception this Pacific railroad 
charter, and amendments, were ^^ conceived in sin, and brought 
forth in iniquity; " that, in its provisions and grants, it pre- 
sents a state of &cts which stamps the whole scheme as a base 
fraud upon the public, planned by men who were seeking to 
ouich themselves at the expense of their country; and that 
congress, either from inattention to the interests of the people, 
or because the spoils were to be divided, granted the company 
the precise charter that was to enable it to plunder the public 
without hindrance. 

That we may not be regarded as treating the subject cap- 
tiously, let us concede that the reason given was a good one, 
and diat the grant of lands would give security to the trans- 
portations of the mails; still the thought presents itself that 
a grttnt of lands to the value of $15,500 per mile would be 
ttnple aid for tibe people to give this company, in the constmc- 
tien of its immL Itisnot agovemment work, owned by ihe 



THB PAOmO SAILBOAD IBIQUirr. SI 

Public, operated and controlled by the government. It ii a 
private enterprise, and while all persons see the necessity of a 
ndlroad connection between the Atlantic and Pacific States, 
bot few will indorse the policy of the government giving to 
this private company more aid in lands and money than the 
entire cost of the road, or more than it would have cost if 
bnilt by private capital. And when it is fonnd that this large 
grant is made without any equivalent, that not even the mails, 
troops, or munitions of war, can be transported over the road 
without the payment of just such rates as this private corpor- 
ation chooses to charge, the conclusion is inevitable that the 
good, not of the public, but of the corporation, was the con- 
trolling motive in affording it aid: that the untold millions of 
subsidy bonds, and vast tracts of lands wrongfully taken from 
the public, and given to this company, was but placing the in- 
terests of the whole people, in their social and business inter- 
course across the continent, at the mercy of a soulless corpora- 
tion. 

The donations we have already noticed are the "right of 
way;" the right to take all building material within ten miles 
of the road, and the grant of twenty sections of land per mile. 
But this is not all. Section five of the act provides: "That 
for the purposes herein mentioned, the secretary of the treasury 
Bhall, upon the certificate in writing, of said commissioners, 
of the completion and equipment of forty consecutive miles 
of said railroad and telegraph line, in accordance with the 
provisions of this act, issue to said company bonds of the 
United States of one thousand dollars each, payable in thirty 
jears after date, bearing six per centum per annum interest 
(said interest payable semi-annually) which interest may be 
paid in United States treasury notes, or in any other money or 
currency which the United States have, or shall, declare lawful 
money, and legal tender, to the amount of sixteen of said 
bonds per mile; and to secure the repayment to the United 
States, as hereinafter provided, of the amount of said bonds 
BO issued and delivered to said company, together with all 
interest thereon which shall have been paid by the United 
Statea, the issue of said bonds and delivery to the company 



92 MONOPOUBS AND TFfE PEOPLK. 

Bliall ip96 facto oonstitate a first mortgage on the whole line 
of the railroad and telegraph, together with the rolling stock, 
fixtures, and property of every kind and description, and in 
consideration of which said bonds may have been issued." As 
we shall hereafter see, this section was amended by act of Jaly 
2d, 1864, so as to allow the company to issue its own bonds to 
the same amount per mile issued by the government, and to 
subrogate the government bonds to those issued by the com- 
pany, thus making the bonds issued by the company the first 
mortgage bonds. 

Section six provides for the transmission of messages by 
telegraph, and die transportation of the mails, troops, munitions 
of war, supplies, and public stores of the government, giving 
it the preference at all times, '^ at fair and reasonable rates of 
compensation, and not to exceed the amount paid by private 
parties for the same kind of service." 

Section eleven reads as follows: 

" That for three hundred miles of said road, most mountain- 
ous and difficult of construction, to wit: One hundred and fifty 
miles we8t¥^ardly from the eastern base of the Rocky mountains, 
and one hundred and fifty miles castwardly from the western 
base of the Sierra Nevada mountains, said points to be fixed 
by the president of the United States, the bonds to be issued 
in aid of the construction thereof shall treble the number per 
mile hereinbefore provided, and the same shall be issued, and 
the lands herein granted be set apart, upon the construction 
of every twenty miles thereof, upon certificate of the commis- 
sioners as aforesaid, that twenty consecutive miles of the same 
are completed; and between the sections last named, of one 
hundred and fifty miles each, the bonds to be issued to aid in 
the construction thereof shall be double the number per mile 
first mentioned, and the same shall be issued, and the lands 
herein granted be set apart, upon the construction of every 
twenty miles thereof, upon the certificate of the commissioners 
as aforesaid, that twenty consecutive miles of the same are 
completed; provided that no more than fifty thousand of said 
bonds shall be issued under this act to aid in constructing the 
main line of said railroad and telegraph." 



THfa FAGZEIO BAILBOAD IHIQTmT. S8 

This vast amount of bonds was issued to the main line of 
the road, which, as will be seen by an examination of the first 
flection of the act, terminates at the western boundary of Nevada 
territory. This company, under its charter, gets $50,000,000 
in bonds; its charter does not authorize it to construct the 
whole road to the Pacific, but to the western boundary of 
Nevada, where it meets the Central Pacinc railroad, built by a 
company chartered by the legislature of Califomia. Tifty 
millions in bonds, with the privilege of subrogating the secu- 
rity for their payment to a like amount issued by the company 
as first mortgage bonds on the road, with the grant of lands 
above named, the right of way, and the right to all building 
material within ten miles of the line of the road; this is 
deemed a fair provision for one company. In order that no 
charge of selfishness, or want of charity should be brought 
against congress, it next turned its attention to other compa- 
nies. Perhaps it was thought promotive of the interest of 
this corporate power, now controlling the government, that 
there should be unity of action and j)urpo8e; that its strength 
should be so great, and its ramifications so extensive, that 
neither private persons nor the public would dare to resist its 
demands. The necessity for a railroad from the Atlantic to 
the Pacific states was not the only consideration influencing 
the law-making power of the country. This fact is clearly 
apparent from the provisions of the charter, for numerous 
branch or spike roads are included in the charter, and provided 
for in the land grants and subsidy bonds. 

Let us look at the '* Central Pacific railroad company," of 
Califomia. This company received its charter from that state, 
was duly organized, and as we are informed, was at work on its 
road when the charter was granted by congress to the " Union 
Pacific." But congress, not to show partiality, in the ninth 
section of the charter of the Union Pacific, provides for the 
Central Pacific as follows: 

" The Central Pacific railroad company, of California, a cor- 
poration existing under the laws of California, is hereby 
aathorized to construct a railroad and telegraph line from the 
Pacific coast, at or near San Francisco, or the navigable waters 



J4 MOWOPOLira AND THE PEOPLK. 

of the Sacramento river, to the eastern boundary of California, 
npon the same terms and conditions, in all respects, as are 
contained in this act for the construction of said railroad and 
telegraph line first mentioned, and to meet and connect with 
the first mentioned railroad and telegraph line on the eastern 
boundary of Califomia.'' 

Here is a company building its road exclusively in a single 
state, under a charter derived from a state having the exclusive 
control of its own afiGurs, and not subject to the legislation of 
congress, or the administration of flie general government, 
like the territories; yet congress, that it may aid a great 
monopoly, assumes control of the matter, reaches out its hand 
laden with the people's land, and the people's money, and says 
to this California company: "If you will unite with and 
become a part of this giant monopoly we are creating to crush 
ttie people, and will accept the provisions of this act and 
render fealty to the general government as the 'higher power,' 
we will give you twenty sections of land, and subsidy bonds 
to the amount of sixteen thousand dollars per mile, with the 
privil^e of issuing your own first mortgage bonds for an 
additional sixteen thousand dollars per mile for evpry mile of 
road you build in the state of California." Of course this 
California company accepts this tempting ofier, and in addi- 
tion to the fifty thousand of subsidy bonds for sixteen thou- 
sand dollars each to the Union Pacific, an additional sixteen 
thousand dollars per mile is issued to the. Central Pacific, all 
of which, as we will show, principal and interest, will in the 
end come out of the pockets of the people. The uniting of 
these two companies, and the completion of their roads and 
telegraph lines, afforded to the country and the government 
(provided in all cases they paid to the companies the amounts 
they charged therefor) a road for the purpose of travel, and 
transportation of freights, and secured a "«a/<? and speedy 
transportation of the nuiilsj troops^ mumtiovs of war^ and 
fyublic stores thereon^^^ and if the construction of the road was 
aided for that purpose, it would seem to have been accom- 
plished, and as a matter of justice to the public, no furtlier 
burdens should have been imposed upon the public Two 



THB PAOIFIO RAILROAD INIQniTT. 25 

oampanies had been provided for at the people's expense, and 
all that was demanded for the prosecution of the public busi- 
ness had been effected. But there was danger that otlier 
through lines of railroad might be constructed across the ter- 
ritories that might become rivals of this giant monopoly. 
The Hannibal & St. Joseph railroad company were across the 
state of Missouri, looking to the west. The Leavenworth, 
Pawnee, & Western company were preparing for action. A 
road was crossing Minnesota and Iowa to strike the Missouri 
river at Sioux City. Any or all of these roads might become 
rivals. To prevent such a catastrophe, and to retain for all 
time to come an absolute and exclusive monopoly, these com- 
panies must be absorbed, or at least rendered harmless. To 
assist this scheme, congress is called upon for further aid from 
the public lands and treasury. The response is all that could 
be desired. It gave the final blow to competition, and left the 
people powerless in the grasp of this, the greatest monopoly in 
the country. A monopoly created by the servants of the peo- 
ple, and enriched with spoils taken from the people, in viola- 
tion of every principle of right and justice, had been created 
by act of congress, and to insure it the absolute control of the 
V country, anything promising competition must be absorbed. 
To accomplish this object the same act, section nine, provides: 
"That the Leavenworth, Pawnee, & Western railroad company 
of E[ansas, is hereby authorized to construct a railroad and 
telegraph from the Missouri river, at the mouth of the Kansas 
river, on the south side, so as to connect with the Pacific rail- 
road of Missouri to the aforesaid point, on the one hundredth 
meridian of longitude west from Greenwich, as herein pro- 
vided, upon the same terms and conditions in all respects as 
are provided in this act for the construction of the railroad 
and telegraph line first mentioned, and to meet and connect 
with the same at the meridian of longitude aforesaid ; and in 
case the general line or route of the road from the Missouri 
river to the Rocky mountains should be so located as to 
require a departure northwardly from the proposed line of said 
Kansas railroad before it reaches the meridian of longitude 
aforesaid, the location of said E^ansas road shall be made so as 



S6 MONOPOLIES AND THE FBOFLB. 

to conform thereto; and said railroad through Ejsinsas shall be 
so located between the mouth of £[ansas river as aforesaid, and 
the aforesaid point, on the hundredth degree of longitude, that 
the several railroads from Missouri and Iowa herein authorized 
to connect with the same can make connections within the 
limits prescribed by this act, provided the same can be done 
without deviating from the general direction of the whole line 
to the Pacific coast." 

It will be seen that one of the rival lines is given a premium 
of lands and bonds to intersect with the Union Pacific near 
the east end thereof ; it becomes, for a consideration, a part of 
this great monopoly, and abandons all idea of competition. 

Section ten provides for a union or consolidation of the 
Union Pacific, the Central Pacific, the Leavenworth, Pawnee 
& Western, and the Hannibal & St. Joseph companies; and 
section thirteen provides : ''That the Hannibal & St. Joseph 
railroad company, of Missouri, may extend its road from St. 
Joseph, via Atdiison, to connect and unite with the road 
through Kansas, upon filing its assent to the provisions of this 
act, upon the same terms and conditions in all respects, for one 
hundred miles in length next to the Missouri river, as are pro- 
vided in this act for the construction of the railroad and 
telegraph line first mentioned, and may for this purpose use 
any railroad charter which has been or may be granted by the 
legislature of Kansas." The section also provides for connect- 
ing this road with the main line. This company promised to 
be a rival, but when congress is appealed to, $1,600,000 in 
subsidy bonds, and two thousand sections of land are given it 
as its share of the spoils, provided it will accept this trifle as 
an inducement to combine its interest with this great corpora- 
tion. This disposes of all rivals south of Omaha. True the 
[>eople have paid dearly for it. They, through their servants 
in congress, have enriched a lot of unscrupulous men, banded 
together for the purpose of plundering the public, and given 
to these corporations the power to oppress the people for all 
time to (rome; but as it afibrds a safe means of transporting 
the mails, etc., for a consideration which the people must pay 
as the services are rendered, the public should not complain. 



THB TACmO RAILROAD INIQUITY. 27 

Congress thonght the matter so important as to reqnire the 
gift of vast sums of the public moneys, and princely donations 
out of the public domain, and as our legislators acted for the 
people, and the companies have built their roads, the public 
must submit. 

But there was danger tliat the roads crossing Iowa and 
Minnesota might compete with the Union Pacific. Sioux City 
was an objective point on the Missouri river. West of that 
city, across the then territory of Nebraska, a road could be con- 
structed at comparatively small cost This line might become 
a rival, and it also must be absorbed. To effect this object, the 
following provision was made a part of the fourteenth section 
of this act : " And whenever there shall be a line of railroad 
completed through Minnesota or Iowa to Sioux City, then the 
said Pacific railroad company is hereby authorized and required 
to construct a railroad and telegraph line from said Sioux 
City, upon the most direct and practicable route, to a point 
on, and so as to connect with, the branch railroad and telegraph 
line in this section hereinbefore mentioned, or with the said 
Union Pacific railroad, said point of junction to be fixed by 
the president of the United States, not farther west than the 
one-hundredth meridian of longitude aforesaid, and on the 
same terms and conditions as provided in this act for the con- 
struction of the Union Pacific railroad, as aforesaid, to complete 
the same at the rate of one hundred miles per year." The 
amendment made to this part of the act in 1864, to which we 
shall refer in another chapter, materially changes its provisions; 
and as we examine these provisions, we will discover that all 
the unjust donations made of the public lands and moneys are 
exceeded in this amendment. 

Now, if the reader will take a map on which the railroads 
are marked, he will discover that from Leavenworth to Sioux 
City all the railroads running west are concentrated into one 
line, after leaving the one-hundredth degree of longitude — the 
Burlington & Missouri railroad company being made by the 
act of 1864 a part of the same great monopoly. By the exclu- 
sive franchises and imperial wealth conferred upon it by con- 
gress, this great corporation is given control, absolute control 



% MOROPOLOS AMD THE FSOFIX. 

of the bufiiness interests of the great west. This grand system 
of railroads looks well on the map, and lends color to the plea 
that the wants of the public and of the government justified 
this large outlay of money and lands; but an inspection of the 
act chartering the companies, consolidating them, and by law 
giving them unlimited control of the interests of the public, 
will convince the impartial reader that the interests of the 
companies, rather than the needs of the government, or the 
welfare of the people, controlled the action of congress. 

Grants of lands and exclusive privileges have been knade to 
other corporations, as also to states, for the purpose of aiding 
in the construction of railroads; but our aim being to combat 
the polic}' itself, as involving gross injustice and oppression, 
and to show its efiects upon the public, we have selected the 
Union Pacitic and its branches as the best illustration of the 
action of congress in making these grants, and the companies 
owning this road and its branches as a fair sample of the daas 
of professed benefactors of the people. 



;CHAPTER III. 

THE MONOFOLISTB 



THE Pacific companies are Buch a deep mine of iniquity, 
we mnst sink our shaft somewhat deeper if we would see 
the true quality of the corruption. In order to fuUy compre- 
hend the injustice done to the people, it will be necessary to 
examine the further legislation of congress in their favor. 

A perusal of the act from which we have quoted will con- 
vince the reader that these companies received all that was 
necessary for the successful completion and operation of their 
road, and its numerous branches, and to enable them to extort 
from the government and the people all that the most grasping 
and avaricious could desire. But, like Oliver Twist, they still 
asked " for more," and they got it; not in more lands and 
money, but in being relieved, by act of congress, from the 
restrictions and duties imposed upon them by their charter. 

The act of congress chartering the Union Pacific railroad, 
and its numerous branches, was amended by the act of July 
2, 1864, in many particulars, to some of which we have already 
referred. The fourth section amends the third section of the 
original charter by increasing the number of sections of land 
granted per mile to said road, from ten to twenty, and allowing 
the selection of the lands to be made within twenty miles of 
the line of road, instead of ten, as provided in the original 
charter; and also provides that the secretary of the interior 
shall withdraw from sale and pre-emption all the land within 
twenty-five miles of the line of the road, until the company 
has selected its twenty sections. The original charter limited 
the withdrawal to fifteen miles. The amendment also qualified 
the term " mineral lands," contained in the original act, so as 
to except from the lands reserved by the government all coal 
and mom. lands; thus enabling the company to select coal and 

(3») 



80 MONOPOLIES AND THX FBOFLB. 

iron lands to the full amout of twenty sections per mile, giving 
to said railroad company, or companies, a monopoly of the coal 
trade in a country where coal is, and will continue to be, the 
greatest desideratum; and the same section gives the company 
the right to use, in fact grants to the company, all the timber 
found on each side of the road within ten miles thereof. The 
company can, under its charter, take all the timber from the 
land it does not select, and then take its twenty sections in coal 
lands, when they can be found. This it has done, and in 
addition, bought of the government other large tracts of coal 
land; not in the name of the company, perhaps, but in the 
name of the individual stockholders. By this means, all who 
settle along the line, in the vicinity of this Union Pacific road, 
are placed in the power of this great corporation, and must 
pay for its fuel and transportation whatever sum may be 
demanded, because the charter does not restrict the company 
in the matter of charges for transportation. 

Section seventeen of the original charter provided that 
twenty-five per centum of the subsidy bonds should be re- 
tained by the gbvemment until the entire line of the road was 
completed. Section seven, of the act of July 2, 1864, repealed 
this provision. 

Other amendments are made for the beuefit of the corpora- 
tion, as to time and manner of payment; but as it is not our 
intention to examine all of its provisions in detail, we pass to 
the tenth section. 

By the original charter, the subsidy bonds issued to the 
company were to be and remain first mortgage bonds upon 
the road and property of the company, the company paying 
six per cent interest (payable semi-annually) on said bonds, 
and the principal in thirty years. The tenth section of the 
amendment reads as follows : 

^^ That section five of said act be so modified and amended 
that the Union Pacific railroad company, the Central Pacific 
railroad company, and any other companies authorized to par- 
ticipate in the construction of said road, may, on the comple- 
tion of each section of said road, as provided in this act, and 
tho act to which thia act is an amendment, issue their first 



THB MONOFOLIBrrB ^' HSLP THEMBBLVBB.'' 81 

mortgage bonds on their respective railroad and tdegraph 
lines, to an amount not exceeding the bonds of the United 
States, and of even tenor, time of maturity, rate and character 
of interest, with the bonds authorized to be issued to said rail- 
road companies, respectively. And the lien of the United 
States bonds shall be subordinate to that of the bonds of any 
or either of said companies, hereby authorized to be issued on 
their respective roads, property, and equipments, except as to 
the sixth section of said act, to which this is an amendment, 
relating to the transmission of dispatches, and the transporta- 
tion of mails, troops, munitions of war, supplies, and public 
stores for the United States." 

By this amendment, the public money appropriated to pri- 
vate corporations, to the amount of about $65,000,000, for 
which security had been taken, on all the property of the com- 
panies, was left in the hands of the companies without any secur- 
ity ; or, in other words, the servants of the people made an ab- 
solute gift of this great sum of money. The history of the 
country, in connection with railroad corporations, demonstrates 
the fact that these corporations by " watering " their stock, and 
characteristic management, show, if they so desire it, no mar- 
gin from the business of their roads. They permit the inter- 
est on their bonds to accumulate, until a foreclosure and sale 
on first mortgage bonds are necessary, and then, under a new 
name, but with the same persons as stockholders, the road is 
bought in and becomes profitable. In this case the amount of 
$65,000,000, and the accrued interest must be first paid, or 
the property of the corporation must be sold, and the public 
money advanced by the govenment will be lost. Even at the 
present time (as we shall show hereafter) the people are paying 
the interest on these subsidy bonds, and the only security they 
have for its repayment is the honor of the company; for all 
precedents prove that as a rule second mortgage bonds, when 
a large sum of first mortgage bonds is to be paid, are of no 
real value. 

Sections fifteen and sixteen provide for a division of earn- 
ings, and a consolidation of the various companies. Sections 
eighteen, nineteen and twenty, provide for the admission of 



8S UOROPOUBB AND THE FBOFLB. 

the Burlington and MisBouri river railroad company as a branch 
of the Union Pacific, with a grant of land in Nebraska. But 
the greatest outrage upon the rights and interests of the people 
in this Pacific railroad law, will be found in the seventeenth 
section of this amendment. By the original act, the Union 
Pacific company was required to construct a branch road from 
Sioux City (on the most direct and practicable route) to some 
point on its road to be fixed by the President of the United 
States (but not beyond the one-hundredth parallel) when a rail- 
road should be constructed through Minnesota or Iowa to Sioux 
City. This new road was to unite with and form a part of the 
great monopoly, and was to receive the same amount of lands, 
and subsidy bonds, per mile, as the main line received. The 
building of this road from Sioux City west, to a proper point 
of connection with the main line, would have cost but little, 
comparatively, because of the favorable character of the country 
through which it would pass. 

For some reason, unknown to the public, it was decided to 
make a change in respect to this branch, not only as to its loca- 
tion, but also as to the company whose dtity it should be to 
build it. To efiect this object, this seventeenth section con- 
tains the following provisions: 

" That so much of section fourteen of said act as relates to 
a branch from Sioux City, be, and the same is hereby, amended 
so as to read as follows: That whenever a line of railroad shall 
be completed through the State of Iowa or Minnesota, to 
Sioux City, such company now organized, or as may be here- 
after organized, under the laws of Iowa, Minnesota, Dakota, or 
Nebraska, as the President of the United States, by its request, 
may designate, or approve for the purpose, shall construct and 
operate a line of railroad and telegraph from Sioux City, upon 
the most direct and practicable route to such point on, and so 
as to connect with, the Iowa branch of the Union Pacific rail- 
road as such company may select, and on the same terms and 
conditions as are provided in this act, and the act to which 
this is an amendment, for the construction of said Union Pa- 
cific railroad and telegraph line, and branches; and said com 
pMiy ihall oomplete tibe same at the rate of fifty mileB per 



THB MOnOPOLIBTB <^BBLP THXIISELYBB." 88 

year. Frovided, that Baid Union Pacific railroad company 
ihall be, and is hereby, released from the construction of said 
branch. And said company constructing said branch shall not 
be entitled to receive in bonds, an amount larger than the said 
Union Pacific railroad company would be entitled to receive if 
it had constructed the branch under this act, and the act 
to which this is an amendment; but said company shall be 
entitled to receive alternate sections of land for ten miles in 
width on each side of the same, along the whole length of said 
branch; and provided further, that if a railroad shall not be 
completed to Sioux City, across Iowa or Minnesota, within 
eighteen months from the date of this act, then said company 
designated by the President as aforesaid, may commence and 
complete the construction of said branch, as contemplated by 
the provisions of this act. Provided, however, that if the com- 
pany so designated by the President as aforesaid, shall not 
complete the said branch from Sioux City to the Pacific rail- 
road within ten years from the passage of this act, then, and in 
that case, all of the railroad that shall have been constructed 
by said company, shall be forfeited to, and become the property 
of, the United States." 

Now if the reader will take a late map, having the lines of 
railroads upon it, he will discover that a road from Sioux City 
to Columbus in Nebraska, would be about one hundred miles 
in length, on a line running nearly west; and at this latter 
point it would intersect and unite with the Iowa branch of the 
Union Pacific; or a line running southwest for a less distance 
would unite with the Union Pacific at Fremont, in Nebraska. 
In the original charter it was contemplated to occupy one of 
these lines, and, in fact, a branch road was commenced from 
Sioux City to Fremont. The directors of this branch, and the 
Union Pacific are in part the same, to-wit: Cakes Ames, of 
Boston, and G. M. Dodge, of Iowa. It would seem that this 
road, running southwest to Fremont, and there uniting with 
the Pacific, would afibrd all necessary facilities for securing 
the transportation of the mails, troops, etc., and that upon no 
. pretext whatever could another grant of land and subsidy bonds 
be aaked. Yet congress thought otherwise, and in the section 
8 



M ICOKOFOLUS AKD THB FBOFLB. 

IuBt quoted, authorized any company organized under die laws 
of Iowa, Minnesota, Dakota, or Nebraska, that might be 
designated by the President of thi United States, on applica- 
tion to him for that purpose, to construct a railroad to unite 
with the Union Pacific, leaving it with the new company to 
fix the point at which it would so unite, but requiring it to 
commence at Sioux City. Taking advantage of this act, two 
companies, the Sioux City & Missouri Valley, and the Chicapx> 
& Northwestern, constructed a line of road from Sioux City co 
Council Bluffs, there to unite with the Pacific; the Sioux City 
& Missouri Valley constructing the road from Sioux City to 
Missouri Valley, and the Chicago & Northwestern from Mis- 
souri Valley to Council Bluffs. This line of road was con- 
structed ostensibly as a part of the Pacific road. It is presumed 
to run west. Look at the map and you will see that from Sioux 
City to Council Bluffs, instead of going west, it runs on a line 
east of south, to the extent of thirty miles. Council Bluffs be- 
ing thirty miles east of Sioax City. The company construct- 
ing this last named, road received from the government a grant 
of one hundred sections of land per each mile, and $16,000 in 
subsidy bonds for each mile of road. This road runs along the 
east side of the Missouri river, and in truth, is of no use as a 
route for the transportation of mails, troops, etc., unless the 
government prefers to use the longest, least expeditious, and 
most expensive line of road. Indeed, it seems to be a road 
that is under the especial care and protection of congress. It 
is called in the Railroad Manual^ "The Sioux City & Pacific 
Eailroad." It was a " nice and fat " job. It has one feature 
not often found in these railroad jobs carried through congress. 
It appears to have been gotten up for the benefit of congress- 
men. After repeated efforts to learn who were the incorpora- 
tors of this company, we addressed a letter to the secretary of 
state of Iowa, and received the following answer: 

Des MomES, December 7, 1873. 
Deab Sib: — In answer to yours of the 6th inst., I will say 
that there is no line of railroad from Sioux City to Council 
Blufis, run as one road or by one company. The Sioux Oity 



THX KOHQPOLIBIB ^HELP THEHSELYXB." 85 

^ Pacific railroad runs from Sioux City ro MisBOuri Valley, 
mnd the Chicago & Northwestern (Cedar Bapids & Missouri 
^ver) from Missouri Valley to Council Bluffs. The incorpor- 
ators of the Sioux City & Pacific company were L. B. Crocker, 
M. BL Jessup, James F. Wilson, A. W. Hubbard, Chas. A. 
Lombard, Frank Schuchardt, W. B. Allison, and John I. Blair. 
Yours Truly, Ed. WmoHT, 

Secretary of State 

Among the present directors, are to be found the names of 
Oakes Ames, John I. Blair, D. C. Blair, and G. M. Dodge. 
Ames was a member of the late congress, and O. M. Dod^;o is 
an ex-member. Among the directors of the Cedar Bapido & 
Missouri River company appear the names of John B. tsMej 
and James F. Wilsou, who were members of congress when 
the act of July, 1864, was passed, amending the chartei of the 
Union Pacific, and making the large grants to the coiiipanj 
designated by the president to build the Sioux City bra)ich of 
the Union Pacific railroad. William B. Allison has l)een a 
member of congress almost continuously from 1860 co the 
present tima 

This Sioux City branch seems to have been a special lavorite 
with certain congressmen. It received the lion's share of lands, 
getting five times as many sections per mile as the main lines, 
and this, too, for the purpose of building a railroad running 
east of south, instead of west — the direction of the main line — 
following the course of the Missouri river on the east side 
thereof for the entire length of this branch, and crossing on 
the bridge to the Nebraska shore at Omaha. 

In addition to the road from Sioux City to Omaha, and for 
the purpose of getting all the land and money possible out of 
the government, the conspirators organized another company, 
under the laws of Nebraska, to wit: The Fremont, Elkborn 
& Missouri Valley company, and built a road running from 
Missouri Valley to Fremont in Nebraska — about fifty miles — 
and these two roads, from Sioux City to Missouri Valley, and 
from Missouri Valley to Fremont, are now called the Sioux 
City & Pacific. We do not know who were the incorporators 



HbA JiBHing 1^^ jiwHwiin •Aumiiui^ Unsm JL Skar^ DL C. Bfadr« 
jHi£ ^Qt^isnijTnmuBii -^Tmit 3>. JO^. Uhst ^sm> ^xamqamuem are 
jifinwihfBttafi. HHfi imoc of mif^ ilimiilmd matiaxtf^ usf Iraid^ and 
'fafm& iEi> ma jmuimn nf (^IHiJW* ymr ^nilb. mdtSi ate pffiwik|pe 
<§£ «*nTT^p £]es2 iniiinBii;!^ ikmrn^ tzr i^ joniuQit ^ftf S^«IUO)i^> per 
rznik, mhiipaiar mnrgsBss^ ixm m -zixt mam r mmuimm mut jobf 

t&s> mj&. HQmu 11 IB' 7emi2mi«rHt£ ^i^aa t^ an&utti <ofiiBt <Gif the 
<wxuBmaxSam\ >vi lihs' Tianil ^vntf- jiias. lamti ^fuitM^ jier mule (as 
.dHi;«(ai iiior t^ Mmi/m^ Mamrkatl ^ joi^ -^isc iifi ik nf 2m& vaiae to 
dis ^r^Kivsmmsmi imiaauir iif iiE& nmz:»&. sk^^ for cttsmmg local 

ilHi tSuni #n4V(<'H'» par scmmxii ^ ik irll] tutu ^ imciiKniSii^ ^^ otm- 
dioDife tt^iifi iSsm jPbS iLniaik' isBc« ^jf 3^ l^fiiiftg- iriiibfsad jjiob was 

fer iQat adhHu^ne' lUmifiBS <^tf (ma^cjF^tKtsnBiL. tiikfiQj- i&Sends and 

We ^ skiA <teBj 3&tf ' T^j^s:^ isk)4 <rQaa!;!!^a$«3»f!fi is^ ls«Ktc»De and 

m; d{^ iemf tijcor ff^isi^i tiio* «^g^ Iba»^ asid in)»oc!i^ i&^ awnpanicB 

t^ rg p reat M tlie pompOe^ Im" a2SaDd tk> a.T><i |*0v«(De^ ttbe public 
iftteraftft. Wlien tb^ Jbrin td&aoD^'nEs im8u» CkiflBpin^ and Tole 
tfebuadaaisd mon^of d&epiEiofSe tts> diieQk9eSTe&,d&eTT]oIale 
dwir tmst, and instead of pcci<ectin^ die peiofiile. pSnnder them, 
and dmde tbe qmliu To g:ire these nnjoit praeikes some 
«i^9r of ri^it, or in some' manner to exeoie themddres for 
IkflS appropriatini^ the weahfa of the conntTT and diriding it 
with iiiu friends, tbejT'afifiert in the laws thus enacted that it 
is done to aid in the ecmstrncdon of railroads^ and ** to secure 
the safe and ^^eedj transmi^don of the maik« tivx>p6. muni* 
tions of war, and goronment sopplies.'' etc It is no part oi 
the dotiea olt congressmen to constract railroads, nor are the 
people nnder obligations to famish them the means tor that 
purpose. When members of congress form themselTes into 
pfirtle eompMiieSy and, to procure the means Uxt proaecnting 



THB M0NQP0LI8TB ^^ HELP THEMSKLYXB.' 8? 

their private enterpriBes, agree to divide among themselves a 
part of the money and property belonging to the public, because 
the position they occupy enables them to do so, they manifest 
the same disregard for the rights of others, and the same dis- 
regard of law that is idiown by the class of men who follow 
theft and robbery for a livelihood. 

But let us follow still further the course of this Pacific rail- 
road company. It would occupy too much space, and weary 
the reader were we to state in detail all the acts of congress 
passed in aid of this gigantic combination. In speaking of the 
Pacific railroad wo are apt to look upon it as simply a line of 
road extending from the Missouri river to the Pacific ocean, 
to consider its great length, the character of the country 
through which it passes, the sparse settlements, the necessity 
for direct and speedy communication between the Atlantic and 
Pacific states, and we yield a ready assent to the action of 
congress in voting lands and subsidy bonds for its construc- 
tion. But when we find that the charters of the Union Pacific 
and Central Pacific companies, and their various amendments, 
together with the several acts of congress making many other 
companies branches of the Pacific road, virtually consolidates 
all the railroads between the cities of St. Louis and St. Paul, 
on the Mississippi river, and all the railroads running west 
from Chicago, into one vast corporation, uniting all in one 
track from Fort Kearney to the Pacific ocean, the people will 
begin to realize that while they thought congress was appro- 
priating lands and moneys solely for the purpose of opening a 
highway across the territories, it was in fact aiding a combina- 
tion of men and corporations in their attempt to control the 
commerce of the great west; and when we further learn that 
this great railroad interest is already virtually consolidated, and 
that the whole people are placed at the mercy of this great 
monopoly, we see at a glance the extent of the power vested 
in it by act of congress. 

Among the railroad companies that are included in this com- 
bination are the following: Chicago & Northwestern; Iowa 
Falls & Sioux City; Cedar Rapids & Missouri River; Leaven- 
W4iirAf Atehiioo A Northwestern; Kansas Pacific; Union Pa- 



I 

88 MONOPOIJE8 Ain> THE FBOFLB. 

cific; Burlington & Missouri River; Sioux City & Pacific; Mis. 
souri River; Chicago, Iowa & Nebraska; Hannibal & St. Joseph, 
and the St. Paul & Sioux City. Most of the above roads re- 
ceived grants of lands; some of them received subsidy bonds, 
ostensibly for the public benefit, but in reality for the purpose 
of combining in one the interests of all these combinations. 
"Whatever may have been the intention of congress in granting 
exclusive privileges to these companies and permitting them 
to unite, the effect has been to fasten upon the great west a 
monopoly that for all time to come will be an instrument of 
oppression. With its vast power and wealth, it can but con- 
trol the fortune of the laboring and producing classes inhabiting 
the richest portion of our common country. The further fact 
that this great corporate power is the particular pet of congress- 
men, and that among its directors and stockholders are members 
and ex-members of congress, render the hope of any change in 
favor of the people remote, if at all attainable. If the reader 
is desirous of learning who are the directors and managers of 
the Pacific railroad and branches, he has only to consult Poor's 
Railroad Man/ual for 1872-3. He will find among the pres- 
ent directors the men who, in congress, voted the lands and 
subsidies to the companies in which they are now directors, and 
also that some of these directors are now holding the offices of 
congressmen and of United States senators. 

By the acts of congress granting and amending the charters 
of the Pacific railroad companies and branches, it is made the 
duty of the president of the United States to appoint five 
directors, '^who shall be denominated directors on the part of 
the government," and these acts forbid such directors being 
stockholders in said Pacific railroad companies. It is made 
the duty of these government directors to exercise a general 
supervision of the Pacific road and branches, and to report its 
condition from time to time to the secretary of the interior. 
In contemplation of law they are to have no pecuniary interest 
in the companies or in the roads. The present government 
directors are B. F. Wade, of Ohio; Hiram Price and J. F. 
Wilson, of Iowa; J. 0. S. Harrison, of Indiana; and D. S. 
Ruddock, of Gonnaeticat By act of congress of June Sd, 



THB MONOFOIJSIS ^^HELP THEMBELVBeu" 89 

18S4, the Cedar Bapids & Missouri Eiver railroad was anthor- 

iied to connect with the Iowa branch of the Union Pacific 

road, and sections fifteen and sixteen of the acts of July 2d, 

1864, place all roads connecting with the Union Pacific on an 

equality as to charges for freights and passengers, and permits 

them to consolidate if thej elect so to do. llie Cedar Bapids 

A Missouri Biver company has leased its road to the Chicago 

& Northwestern company, and it is operated in connection 

with the Union Pacific, uniting with it at Council Bluffs, and 

it virtually becomes a branch of the Union Pacific road. The 

reader can look over the list of directors, as shown in the 

Railroad Mantial, before referred to, and learn if any of the 

government directors of the Union Pacific are directors in the 

Cedar Bapids & Missouri Biver company. The reports made 

of the cost, condition, and other matters connected with Pacific 

railroad enterprises, disclose such utter disregard of the rights 

and interests of the people, and such a gross betrayal of the 

public good for the benefit of a ring (in part a congressional 

ring) as to leave it without precedent. 

The fact that the men who formed this ring have become a 
powerful moneyed aristocracy, able by their votes and influence 
in congress to convert the public lands and money to their own 
use, and are now boldly taxing the people with the interest on 
the money appropriated to build up these oppressive monopo- 
lies, should arouse the country to a sense of its imminent peril. 



CHAPTER IV. 

HOW O0NORE8B BETRAYED THE FBOPLB. 

IN order to fully realise the great power of what is known 
as the Pacific railroad companica, it will be necesBaiy to 
look at the Central Pacific company, and its control of the 
transportation of freights and passengers from the Pacific 
country. This company, organized under the laws of Call- 
fomia, was, by act of congress of Jnly 1st, 1862, admitted into 
the grand combination known as the Pacific roads, and granted 
eqnal privil^es with the Union Pacific and branches. The 
Central Pacific extends from the Pacific ocean to Ogden, a dis- 
tance of eight hundred and eighty-one miles. The acts of 
congress of April 4th, 1864, and July 2d, 1864, granted to this 
company additional priWl^es and powers, including the right 
of consolidating with all the companies on the Pacific coast 
In 1870 the following companies, to-wit: The Western Pacific 
railroad company; the San Francisco, Oakland & Alameda 
railroad company; the San Joaquin railroad company; the Cal- 
ifornia & Oregon railroad companies were consolidated. 

The state of California at that date had but one thousand 
and thirteen miles of road within its borders. Of this number 
of miles, about one-half became a part of the Central Pacific, 
by the consolidation as above stated. All the roads pointing 
towards the east were combined in this one great corporation, 
forming a solid body, with one common and general object 
and interest, viz.: a monopoly of the travel and traffic with 
the eastern states. And congress, by appropriating lands and 
subsidy bonds, and granting exclusive rights and privileges to 
this monster monopoly, has given it the key not only to the 
overland commerce of the country, but also to the commerce 
of our country with other nations upon the Pacific coast This 
giant monopoly, bj the aid of oongress, has obteinfld tho abM>. 



HOW OONGBBBS BETRAYED THE FBOFLB. 4) 

lute control of the best interests of the whole people for all 
time to come — a control that is now being used, and will con- 
tinue to be used, to enrich its own members and stockholders 
by oppressive levies for transportation over its roads. 

To fully comprehend the cost to the country of these muni- 
ficent gifts by congress to the Union and Central Pacific cor- 
porations, let us examine the expense somewhat in detail. 

First A grant is made of all the material needed in the 
construction of the roads, found within ten miles of the line 
of said roads. 

Second. A grant of thirty-five million acres of the public 
lands, amounting, at $1.25 per acre, to $43,750,000. This vast 
amount of land is taken from the people and given to compa- 
nies by congressmen who in some instances are members of 
the companies, and receive their ^^ rata share of the grants. 

Third- Aid voted by congress in shape of subsidy bonds, 
$65,000,000, payable in thirty years, with six per cent, per 
annum. The Aeory was that the companies would pay the 
interest as it matured (semi-annually) and eventually the prin- 
cipal. But that this was not the intent of die companies, nor 
uf congress, is apparent from the different acts regulating the 
matter, and as the case stands, the government is actually 
paying the interest and collecting the amount from the people 
in tariffs and excise taxes. The payment of the amount of 
these bonds, with the interest according to their terms, will 
require about $200,000,000. This amount, or nearly all of it, 
will be paid by the people, and not by the companies. The 
report of the secretary of the treasury shows that the amount 
of interest annually due on these subsidy bonds is $3,875,000, 
of which the Pacific railroad companies have paid about 
$750,000, and the government the balance, say $3,125,000. 
The original charter of the companies provided that the 
charges for carrying done for the government should be 
credited to the companies in liquidation of these bonds, and 
also that five per cent, of the net earnings of the road should 
be applied to the same object. The secretary of the treasury 
of the United States insisted that these companies should be 
bound by this provision of their charters, refused to pay them 



CHAPTER IV. 

HOW O0NOSE8B BETRAYED THE FBOFLB. 

IN order to fully realize the great power of what is known 
as the Pacific railroad companies, it will be neoesBaiy to 
look at the Central Pacific company, and its control of the 
transportation of freights and passengers from the Fteific 
country. This company, organized under the laws of Cali- 
fornia, was, by act of congress of July Ist, 1862, admitted into 
the grand combination known as the Pacific roads, and granted 
equal privileges with the Union Pacific and branched. The 
Central Pacific extends from the Pacific ocean to Ogden, a dis- 
tance of eight hundred and eighty-one miles. The acts of 
congress of April 4th, 1864, and July 2d, 1864, granted to this 
company additional privileges and powers, including the right 
of consolidating with all the companies on the Pacific coast 
In 1870 the following companies, to-wit: The Western Pacific 
railroad company; the San Francisco, Oakland & Alameda 
railroad company; the San Joaquin railroad company; the Cal- 
ifornia & Oregon railroad companies were consolidated. 

The state of California at that date had but one thousand 
and thirteen miles of road within its borders. Of this number 
of miles, about one-half became a part of the Central Pacific, 
by the consolidation as above stated. All the roads pointing 
towards the east were combined in this one great corporation, 
forming a solid body,' with one common and general object 
and interest, viz.: a monopoly of the travel and traffic with 
the eastern states. And congress, by appropriating lands and 
subsidy bonds, and granting exclusive rights and privileges to 
this monster monopoly, has given it the key not only to the 
overland commerce of the country, but also to the commerce 
of our country with other nations upon the Pacific coast This 
giant monopoly, by the aid of congress, has obtained the ab(M>> 



HOW OONGBB8S BETRAYED THE FBOFLB. 4) 

Inte control of the best interests of the whole people for all 
time to come — a control that is now being used, and will con- 
tinue to be used, to enrich its own members and stockholders 
by oppressive levies for transportation over its roads. 

To fully comprehend the cost to the country of these muni- 
ficent gifts by congress to the Union and Central Pacific cor- 
porations, let us examine the expense somewhat in detail. 

First A grant is made of all the material needed in the 
construction of the roads, found within ten miles of the line 
of said roads. 

Second. A grant of thirty-five million acres of the public 
lands, amounting, at $1.25 per acre, to $43,750,000. This vi^t 
amount of land is taken from the people and given to compa- 
nies by congressmen who in some instances are members of 
the companies, and receive their ^^ rata share of the grants. 

Third- Aid voted by congress in shape of subsidy bonds, 
$65,000,000, payable in thirty years, with six per cent, per 
annum. The tiieory was that the companies would pay the 
interest as it matured (semi-annually) and eventually the prin- 
dpd. But that this was not the intent of die companies, nor 
of congress, is apparent from the different acts regulating the 
matter, and as the case stands, the government is actually 
paying the interest and collecting tlie amount from the people 
in tariffs and excise taxes. Tlie payment of the amount of 
these bonds, with the interest according to their terms, will 
require about $200,000,000. This amount, or nearly all of it, 
will be paid by the people, and not by the companies. The 
report of the secretary of the treasury shows that the amount 
of interest annually due on these subsidy bonds is $3,875,000, 
of which the Pacific railroad companies have paid about 
$750,000, and the government the balance, say $3,125,000. 
The original charter of the companies provided that the 
charges for carrying done for the government should be 
credited to the companies in liquidation of these bonds, and 
also that five per cent, of the net earnings of the road should 
be applied to the same object. The secretary of the treasury 
of the United States insisted that these companies should be 
bound by this provision of their charters, refused to pay them 



42 MONOFOLOIS AND THE PEOPLE. 

their earnings for goTemment services, and also demanded the 
fiye per cent, under the law. The companies refused to pay 
the five per cent, of their net nearings, and demanded pay for 
transportation. If we remember that congress had already so 
amended the charters of these companies as to permit them to 
issue $65,000,000 of their own bonds as " first mortgage bonds," 
and provided that the subsidy bonds obtained from govern- 
ment should be subordinate or junior to the bonds issued by 
the companies, and also bear in mind that these amendments 
also provided that whenever twenty miles of road' was com- 
pleted the patent for twenty sections of land per mile was to 
issue to the companies, so that when the roads were com- 
pleted they would have title to all their lands, we will see good 
reason for the stand taken by the United States secretary of the 
treasury. 

The security which the United States had for the payment 
of the principal and interest of the bonds, under the charter, 
was destroyed by subsequent legislation, and unless the secre- 
tary could retain the amounts due from government for trans- 
portation, and collect the five per cent., the whole amount of 
the subsidy bonds, would be lost to the government and the 
people. The facts of the case being well known to congress, 
who are supposed to be the representatives of the people, and 
to legislate in their interest and for their benefit, it would 
hardly be supposed that an act would pass both branches, and 
receive the approval of the president, compelling the secretary 
of the treasury to yield to the demands of these corporations. 
Honest legislation, and a decent regard for the public welfare, 
would seem to forbid any attempt on the part of any one of 
the departments of the government to aid the companies in 
their dishonest endeavor to avoid the provisions of a charter 
which had been enacted for their special benefit. And when 
it is remembered that at the time the application was made to 
congress (March, 1871,) certain members were stockholders 
and directors in these same companies, one would not think it 
possible that an act could be passed relieving the companies 
from these requirements of their charters, or only possible 
because of the practice being so long established for congress- 



HOW OaNOBE88 BETBATSD THE PBOFLE. 43 

men to appropriate pubKc landfi and moneys to their own use, 
ihat they had arrived at the point where they deemed the 
property and money of the government lawful plimder, and 
that their first duty was to provide for the rings and corpora- 
tions in which they had a personal interest. It seems to have 
required some strategy for the friends of these corporations to 
grant them the aid they asked. Afraid to take issue with the 
secretary of the treasury, and unwilling to hazard the success 
of their scheme by an attempt to pass an act for the relief of 
these railroad companies independently of any other measure, 
to insure the safe passage of the legislation and its approval by 
the president, congress, by an amendment, tacked it to the 
army appropriation bill, (which passed March 3d, 1871,) secured 
the relief asked for. 

Section nine of the army appropriation bill reads as follows: 
** That, in accordance with the fifth section of the act approved 
July 2, 1864, entitled ^An act to amend an act to aid in the 
construction of a railroad and telegraph line from the Mis- 
souri river to the Pacific ocean, and to secure the same for 
postal, military and other purposes, approved July 1, 1862,' 
the secretary of the treasury is hereby directed to pay over in 
money to the Pacific railroad companies mentioned in said act, 
and performing services for the United States, one-half of the 
compensation, at the rate provided by law for such services 
heretofore or hereafter to be rendered: Provided^ that this 
section shall not be construed to affect the legal rights of the 
government or the obligations of the companies, except as 
hereinafter specifically provided." 

This act was approved by the President, and the question at 
issue between the secretary of the treasury and the companies 
was settled by congress in fevor of the latter — absolutely re- 
lieving them from the payment of any part of the $65,000,000 
of subsidy bonds, except such sums as may be paid by allow- 
ing the government to retain one-half of the earnings of the 
roads for carrying mails, etc., which sums, as shown by the 
companies themselves, amount to less than one-fourth of the 
annual interest accruing on the bonds. The people must pay 
all the balance, principal and interest These companies have 



44 JiONOPOLIES AND THE PBOPLB. 

reoeived in lands and bonds, from the general goyernmenti 
aboat $109,000,000, to aid in the construction of their ro«4S| 
and all that government receives in return is one-half of the 
fare levied on government transportation over these roads, **at 
the price fixed by law." The only provision as to price is, 
that after having donate to the companies sufficient to pay the 
entire cost of the construction of the roads, government shall 
pay such reasonable prices as may be agreed upon, not exceed- 
ing the rate the companies charge to other parties. When we 
we say '* entire cost," we do not mean the full cost claimed by 
the companies, for it is not policy for them to make a correct 
showing in this matter; we mean the real actual cost We 
cannot find a statement of the cost of the Union Pacific, and do 
not know what the company claim to be its cost per mile, or 
the aggregate cost. The Central Pacific puts the costs of its 
roads at $120,000,000 or about $136,000 per mile. It shows 
a paid-up capital stock of $54,000,000, and a funded debt of 
about $82,000,000, making its indebtedness about $16,000,000 
more than the entire cost of its road, including rolling stock 
and equipments. Making a liberal margin for the value of 
these last named items, and allowing the Central Pacific to 
cost nearly double the ordinary cost of other roads, and the 
reader niU8t conclude that there has been, in this case, a water- 
ing of stock and an excessive issue of bonds for the benefit of 
the company and at the expense of the people. The statement 
of the capital stock and funded debt of the Union Pacific shows 
about the same condition for its road as to indebtedness; but 
the estimated cost of the road is not given. 

For proof that we are not mistaken in our estimated cost of 
these roads, and that the companies have received from the 
government a sum more than sufficient to defray the entire 
expense of their construction, we turn to reports of the cost of 
railroads generally, in the country, made by men who are in 
sympathy with our present railroad system. These men say 
that the cost of railroads in this country, from their first intro- 
duction, is about $50,000 per mile, and that those constructed 
recently will average about $30,000 per mile. We are apt to 
think diat the cost of the Pacific roads would exceed that of 



HOW OOMGRB88 BETRAYED THE FBOFLB. 45 

moBt other roads. Snch is not the fact. On the contrary, 
taking the entire road into consideration, the line was more 
fiiYorable than any other in the country. It is thus described 
in the BaXI/road 2£am/ual before referred to: 

" The route for the eastern portion of the line is up the val- 
ky of the Platte, which has a course nearly due east from the 
base of the mountains. Till these are reached, this valley pre- 
sents, probably, the finest line ever adopted for such a work for 
an equal distance. It is not only straight, but its slope is very 
nearly uniform toward the Missouri, at the rate of about ten 
feet to the mile. The soil on the greater part of the line forms 
an admirable road bed. The road, after leaving the mountains, 
has very few affluents, the only constructed bridges for the dis- 
tance being one over the Loup Fork and the North Platte. 
The base of the mountains is assumed to be at Cheyenne, five 
hundred and seventeen miles from the Missouri river. This 
part IB elevated six thousand and sixty-two feet above the sea, 
and five thousand and ninety-five feet above Omaha. From 
Cheyenne to the summit of the mountains, which is elevated 
eight thousand two hundred and forty-two feet above the sea, 
the distance is thirty-two miles. The grades for reaching the 
summit do not exceed eighty feet to the mile. The elevation 
of the vast plain from which the Rocky Mountains arise, is 
so great, that the mountains, when they are reached, present 
no obstacles so formidable as those ofiered by the Alleghany 
ranges to several lines of railroads which cross them. * * 
* * The line of the railroad up the eastern slope of the Eocky 
Mountains is not so difficult as those upon which several great 
works have been constructed in the eastern states. After 
crossing the eastern crest of the ihoiintains, the line traverses 
an elevated table land for about four hundred miles, to 
the western crest of the mountains, which forms the eastern 
rim of the Salt Lake basin, and which has an elevation of seven 
thousand five hundred and fifty feet above the sea. Upon this 
elevated table land is a succession of extensive plains, which 
present great facility for the construction of the road. Tlie 
whole line is a very favorable one when its immense length is 
considered. More than one-half of it is practically level. 



46 MOKOFOLIES AND THE PEOPLE. 

while the monntain ranges are Burmonnted by grades not in 
any case exceeding those now worked upon some of most sue- 
cessfdl roads." 

The description of the line of the Central Pacific, or western 
six hundred and sixty-seven miles, from Ogden to Sacramento, 
will not vary much from that given of the Union Pacific. It 
is not quite so favorable. Taking the character of the route 
as given, with the facilities for building the road, and it is not 
probable the actual cost of construction averaged more than 
$30,000 per mile, or $57,000,000 for the whole line. Taking 
the highest rate, as given, viz.: $50,000,000, and apply to the 
whole road, the entire cost would be $94,000,000. 

To aid in the construction of this road, the government 
issued subsidy bonds at the rate of $48,000 per mile for three 
hundred miles, $32,000 per mile for nine hundred and four 
miles, and $16,000 per mile for the balance of the main road 
and branches. The funded debt of the companies owning and 
operating the road (not including the debts of the branches), 
after deducting the amount of bonds they received from the 
government, to- wit: $65,000,000, is, as shown by their own 
report, $93,000,000. How much their floating debt amounts to 
we cannot tell. The stock on their road cannot cover one- 
tenth of the amount of their debts. The companies report a 
paid up capital stock of $91,028,190. The statement of ac- 
count would be about as follows: 

CREDIT ACCOUNT. 

Paid up capital $91,028490 

Bonds from government 65,000,000 

Funded debt 93,000,000 

Total invested 1249,028,190 

COKTRA. 

Actual cost of construction 194,000,000 

Balance 1155,028,190 

Deduct for 87,500,000 acres of land at 11.25 per acre 46,875,000 

Balance against road 1108,153,190 

Thus, after placing the land received from the government 
to the credit of the road, still a small balance of more than 



HOW CONGKBBB BKTBATED THE PBOFLB. 47 

$108|000y000 has disappeared and the companies are not able to 
pay the interest on the government bonds. The reports of 
these companies show, for the year 1871, that the net earnings 
of their roads (oyer and above all expenses, inclading taxes, 
repairs, damages to property and persons, cost of snow sheds, 
and all other items of expense) amoimted to about $9,000,000, 
and yet because these companies asked it, congress released 
them from the payment of the interest on the subsidy bonds. 

The conclusion to be drawn from the facts of the case, as 
they develop themselves, is, that these Pacific railroad compa- 
nies have used the Federal offices, and the public moneys, and 
lands, for enriching themselves; that a <M>mpany of men, in 
congress, and out of it, have combined and confederated 
together for the purpose of robbing the people, and controlling 
the government We have selected the Union and Central 
Pacific companies for illustrations, and attempted to state the 
fiMts in their case, not because of any exception that they 
present to the general rule, but to show the manner in which 
the people are duped and defrauded by congressmen voting 
government aid to railroad companies, under the pretext of 
developing the country, and the equally false necessity of pro- 
viding speedy and secure transportation for the mails, troops, 
supplies, and munitions of war. 

One peculiar feature about the whole matter is, that con- 
gressmen have deemed it necessary for the accomplishment of 
their object, to become personally interested in their own legis- 
lation by subscribing stock, and becoming directors in the 
companies to which they voted these aids. We can name 
congressmen who, if they were not stockholders in these 
Pacific roads, at the time the bonds and lands were voted, cer- 
tainly were stockholders and directors when these companies 
were relieved from the payment of the interest on the bonds 
issued to them by the government, to- wit : Oakes Ames and 
James Brooks. How many more held stock we cannot tell; 
but the fact that members were stockholders and directors 
must have been known to the different departments, for, under 
the charter of these companies, the directors, and es}>ecially 
the government directors, are required to report in detail the 



48 MONOFOLIEB AlfD THB FBOFLE. 

condition of the companies, and the names of the direeton 
once each year to the secretary of the interior, at Washington. 
If the reader would know the extent of congressional legisla- 
tion in favor of the rings, and combinations of men, plundering 
the people, he need only look over the different acts of congress 
passed directly for their benefit during the last twelve years. 
He will arise from their perusal feeling that the chief duty of 
the government is to foster, protect, and enrich these rings at 
the expense of the people. 

These Pacific companies are required, by their charters, to 
construct telegraph lines along the route of their roads, and 
to transmit messages for the government at such rates as they 
charge other parties. The appropriations by congress show 
that $40,000 have been voted annually to pay for telegraphic 
dispatches, between the Atlantic and Pacific, but there is 
nodiing to show that any such sum was due from the govern- 
ment for telegraphing. Among the appropriations is an item 
for the mileage of the government engineer for travel, from 
Cincinnati to Omaha, and from Omaha to Washington, and 
thence to New York; but the charters of the companies re- 
quired them to pay the expenses incurred on account of the 
services of persons api)ointed by the president to inspect these 
roads. Indeed, the action of congress is such as to induce the 
belief, that these ix)ad8, if not owned by the general govern- 
ment, are owned by congress, or congressmen, and that it is 
perfectly legitimate and proper for government to pay the cost 
of their construction, and of the telegraph lines, and also their 
junning expenses. Tlie energy and zeal manifested by con- 
gress, in aid of these corporations, and the great number and 
variety of acts passed for their benefit, demonsti*ate the feet 
that while the representatives of the people assemble at Wash- 
ington ostensibly to legislate for the public generally, they 
devote their time to legislation for their own benefit, 4nd that 
of the numerous corporations and companies of which they 
are members. 



CHAPTEB V. 

OOSOBEBB BB0OME8 A OTOOK EXOHANGB. 

IN scanning the names of the directors of the railroad cor- 
porations which have received large grants of lands, 
subsidies, and special and exclusive privileges, we find many 
ex-members of congress in whose terms of service these grants 
were voted. We also find members of congress who were 
directors at the time their relief and aid bills were passed. We 
find one member who is now a director in three of the com- 
panics receiving the largest sums from government, and which 
are considered the best of all, because of the opportunity the|^ 
present to enierprismg men of legislative and financial ability; 
and in order that proper provision should be made for his 
kindred, one of the brothers of this same congressman is a 
director in five of these land grant subsidy corporations. 
These jobs are " nice and fat," made so by the unjust legisla- 
tion of congress, and being " nice and fat," the division and 
distribution of the spoils is made among these congressmen 
and their firiends. The practice of voting the money and 
lands of the public to these corporations has become so com- 
mon that it is considered legitimate to bribe or buy the votes 
and infiuence of certain congressmen in fitvor of certain grants. 
Large bribes have been offered, and perhaps accepted for these 
purposes. So common is the practice of lobbying these jobs 
through congress that it excites but little attention save in 
extraordinary cases, and elicits but little comment The power 
and corrupting infiuence of these corporations have grown to 
such proportions that they and their fiiends in congress can 
disregard and defy public opinion, and compel all the depart- 
ments of the government to yield to their demands. They 
plunder the people with impunity. They have transformed 
the goyemment; while we are in name a republic, and 
4 (40) 



60 MONOPOUBS AND THB FBOFLB. 

theorectically the people govern, we are in fact an oligarchj, 
and corporations rule the country. If the reader hae foUoMred 
UB thus far he will have seen tfiat wKile the idea of public 
necessity has been put prominently forth as the excuse for the 
great donations made to railroad companies, and the apology 
for the special privileges granted to them, in fact, the real 
object has been to create by special charter a privileged class 
with facilities to amass fortunes, and by the power granted 
to this class of perpetual succession and exclusive right und<»* 
the law, to compel the whole people to pay tribute to it. This 
power is so great at this time, that it controls the whole com- 
merce of the country; and as we will hereafter demonstrate, it 
controls not only the financial, but also the judicial depart- 
ment, and reigns supreme in the general politics of the country. 
Looking at these charters the thought is presented to the 
mind, and the idea is incorporated in the charter, that the 
people of the whole country are petitioning congress to grant 
aid to these companies for the purpose of developing the 
country; that by a spontaneous movement on the part of the 
whole people congress is called upon to incorporate these differ- 
ent companies, and to grant lands and money to aid in the 
different enterprises as they are presented. To give color to 
this idea, the names of men from most of the states and terri- 
tories are included among the incorporators, some fifteen or 
twenty of whom are named as provisional directors who are to 
hold their places until the first regular meeting of the company, 
and the election of officers. Congress fixes the time and place 
of meeting and the notice to be given to the stockholders, and 
to carry out the idea that it is to be a company in whicJi all 
can participate, the charter provides that any person can sub- 
scribe stock and become a stockholder who desires to do so. 
In fact, though, no petitions have been presented to congress, 
nor do any considerable number of the persons named as cor- 
porators know of the organization, or that their names have 
been nsed; nor is it intended that they should know; the 
fifteen or twenty interested parties who have formed their plan 
for a raid upon the treasury, are the only ones, besides their 
particalar friends in congress, who are supposed to know any- 



CONGRESS BECOMES A STOCK EZOHANOB. 51 

thing abont it. These fifteen or twenty men who have gotten 
up the scheme, meet and elect themselves directors, and are 
then ready for action. Having obtained their charters, and 
oiganized under them, the work of robbing the people begins. 
With their friends, and some of their directors in congress, 
they have been able thus fEir to obtain all they demanded. 
There is no authority for the assumption that the chartering 
of these companies is in obedience to the wish of the people, 
either expressed or implied. On the contrary, this action of 
congress has uniformly been in opposition to public opinion, 
and indeed it has excited popular remonstrance. None but 
the few who wish to get their hands into the public treasur} 
have asked the interference of congress, or desired the govern- 
ment to aid in these enterprises. So great is their anxiety to aid 
ia the development of the country that substantially the same 
companies undertake to construct all the roads for which con- 
gress will grant sufficient aid. All these railroad schemes 
which have received the special attention of congress were 
planned by a set of unscrupulous men, who combined to plun- 
der the treasury. 

The system of aiding in the construction of railroads by 
grants of land was inaugurated in 1850, by grants to the Illi- 
nois Central, and did not develop itself fully until 1862, when 
the plan of obtaining charters from congress, connected with 
grants of land and subsidies, was systematically adopted. Since 
the latter date the practice has increased with fearful rapidity, 
and within the last four or five years it has assumed such im- 
mense proportions as to threaten the entire subversion of the 
government. 

The greatest raid made upon congress for these grants and 
special charter privileges during any one term was at the session 
closing March 4th, 1868. When it is remembered that the 
public business did not require these roads, and that tlie people 
had not asked congress to aid in their construction, it seems 
incredible that in the fortieth congress representatives and 
senators should have introduced more than one hundred cmd 
^fby aUs and resohUions to aid railroad companies. Yet such 



62 « MONOFOIIB8 AND THE FBOPLB. 

is the &ct. A gentleman who spent mnch time in Washingb)!!^ 
and examined into this matter, writes as follows: 

"The latest developments show that in the grandeur and 
number of their schemes of spoil and plunder, the oongrieiB- 
ignal rings of railroad jobbers throw into the shade all other 
rings of the lengthy catalogue of confederate treasury ro1[>- 
bers. * * * One hundred and fifty-nine railroad bill's 
and resolutions have been introduced into the fortieth congress, 
and twice as many more are in preparation in the lobby; 
one hundred millions of acres of the public lands, and two 
hundred millions of United States bonds would not supply the 
demands of these cormorants. In other words, this stupend- 
ous budget of railway jobs would require sops and subsidies 
in lands and bonds, which, reduced to a money valuation, 
would swell up to the magnificent figure of half of the national 
debtl" He .continues: "Among the jobs of this schedule is 
the Atchison & Pike's Peak railroad company, or Union fiu 
cific Central branch, which, after having received government 
sops to the extent of six millions, puts in for seven millions 
more. Next comes the Denver Pacific & Tel^raph company, 
which, having feathered its nest to the tune of thirty-two 
mUUonSj puts in for a little more, and this company is re- 
ported to be a mere gang of speculators, without any knowii 
legal organization whatever — a set of mythical John Does and 
Richard Eoes, who cannot be found when called for. Next, 
we have the Leavenworth, Pawnee & Western railroad, now 
known as the Union Pacific, eastern division, chartered by itie 
Kansas territorial legislature in 1855, subsidized with Delaware 
Indian Reserve lands in 1861, and then in 1862, by a rider on 
the Pacific railroad law, granted sixteen thousand dollars per 
mile in United States bonds, and every alternate section of 
land within a certain limit on each side of the line of the road, 
and the privilege of a first mortgage (by subsequent amend- 
ment) to secure bonds issued by the company to the amount 
of sixteen thousand dollars per mile. It further appears that a 
clique of seceders from the old company illegally formed a new 
company, and having by force of arms taken possession of the 
the road, are pocketing the spoils which legally belong to the 



€X>l!rQBBn BBCX)10CS A STOCK EXGHANOB. 53 

old compauy. All this, too, with the consent of the president, 
tiie secretary of the treasury, and congress. From another 
aoiuoe we learn that some half dozen Pacific branch or main . 
stem railroads, northern and southern, are on the anvil, involv- 
ing lands and bonds by tens and twenties, and hundreds of 
millionB; that Senator Pomeroy of Kansas, has seven of these 
jobe on the docket; Senator Eamsey, of Minnesota, four; Sena- 
tor Connors, of Califomia, five; and Senator Harlan, of Iowa, 
foor. Senator Pomeroy, however, distances all competitors in 
the number and extent of his jobs, for, as it appears, they in- 
indnde a line from Kansas to Mexico, three bills for roads, 
fiDom Fort Scott to Santa Fe, in Texas, a South Carolina 
roa^ through to the Sea Island cotton section, two or three 
lines from the Mississippi river through to Texas, and a little 
private Atchison Pacific — one of the nicest and fattest specu- 
lations ever worked through. Is not this a magnificent budget, 
and is not the audacity of these railroad jobs and jobbers posi- 
tively sublime?" 

We do not vouch for the entire accuracy of the statements 
above quoted, but we know that much contained in them is 
absolutely true. If the congressional committee now investi- 
gating the alleged Credit Mobilier frauds, perform their duty 
honestly and faithfully, we will probably learn that the John 
Does and Richard Roes referred to were Ames, Alley, and 
other distinguished persons in congress and out of it. An 
eoEpos^ by this committee of the sum total voted to this eastern 
division of the Union Pacific, and the actual cost of the road 
and telegraph lines, would show a large margin for division, 
a goodly portion of which found its way into the pockets of 
members of congress. Can it be claimed that the needs of 
government required these large subsidies of lands and money? 
flad the people requested congress to make these grants? Has 
the development of this country returned to the people a tithe 
of the wealth thus recklessly given away by congress? The 
people are now groaning under the burdens imposed upon 
, them by reckless or dishonest legislation at Washington. We 
might well stop and inquire from what source the power for 
this kind of legislation is derived. Mr. Washburn of IllinoiS| 



S4 MONOPOLIES AND THB PEOPLE. 

now United States miniBter at Paris, in a speech in congresiB^ 
in the winter of 1868, seems to have comprehended the situa- 
tion, and in opposition to the system of plundering the public 
treasury, spoke as follows: 

" With the unreconstructed states admitted into the Union, 
with ftill and equal protection for all men, in all of the states, 
and with manhood suifrage secured by legislation or constitu- 
tional amendments, the minds of the people will turn to ques- 
tions of finances, of taxes, of economy, of decreased expendi- 
tures, and honest and enlightened legislation — to questions of 
tariff, and to questions of railroads, telegraphs, and express 
monopolies which are sucking the very life-blood of the people 
— to the administration of tiie revenue laws and to the rob- 
beries and plunderings of the treasury by dishonest office holders. 
Already the eyes of the people of this country are upon con- 
gress. I may say they are upon the Bepublican majority in 
congress, for that majority is now responsible before the country 
for the legislation of congress. It can make and unmake 
laws in defiance of executive vetoes. The Eepublican party 
triumphed because it was pledged to honesty and economy, 
to the upholding of public faith and credit, and to the faithful 
execution of the laws. * * * The condition of the 
country, the vast public debt, the weight of taxation, the 
depreciated and fluctuating currency, the enormous expendi- 
ture of public money, maladministration of the government, 
the extortion of monopolies press upon our attention with 
most crushing force. The people elected General Grant to the 
presidency — not only on account of the great and inestimable 
services he had rendered the country, in subduing the rebellion, 
not only on account of his devotion to the great principles of 
the Eepublican party — but because they believed him to be 
emphatically an honest man, and an enlightened statesman who 
would faithfully administer the laws without fear, favor or 
affection. The time has come when we are imperatively called 
upon to take a new departure. Added to the other terrible 
evils brought upon tlie country by the war for the suppression 
of the great rebellion, in the demoralization incident to all 
great wars, and to the expenditure of vast and unheard of 



OayOBBBH BBOOMES A SIOOK SX0HAN6S. 55 

amonntB of public money; to the giving out of immense con- 
tnetS) bj which sudden and vast fortunes were made; the 
inflation of the currency, which engendered speculation, prof- 
ligacy, eoctravagance, and corruption, by the intense desire to 
get suddenly rich out of the government, and without labor, 
and the inventions and schemes generally to get money^ut of 
the treasury for the benefit of individuals without regard to 
the interest of the government While the restless and un- 
pansing energies of a patriotic and incorruptible people were 
devoted to the salvation of their government, and were pouring 
out tiieir blood and treasure in its defense, there was a vast 
army of the base, the venal, and unpatriotic who rushed to 
take advantage of the misfortune of their country, and to 
plunder its treasury. The statute books are loaded with legis- 
lation which will impose burdens on future generations. Public 
land enough to make empires has been voted to private rail- 
road corporations; subsidies of untold millions of bonds, for 
the same purposes, have become a charge upon the people, 
while the fetters of vast monopolies have been fastened closer 
and still closer upon the public. It is time that the representa- 
tives of the people were admonished that they are the servants 
of the people, and are paid by the people; that their constitu- 
ents have confided to them the great trust of guarding their 
rights and protecting their interests; that their position and 
their power is to be used for the benefit of the people whom 
they represent, and not for their own benefit and the benefit 
of the lobbyists, the gamblers and the speculators who have 
come to Washington to make a raid upon the treasury." 

The above shows the light in which Mr. Washburn, four 
years ago, viewed the matters of which we are now treating. 
Since the delivery of that speech act after act has been passed 
by congress in favor of these corporations, giving them greater 
privil^es, releasing them from their obligations to govern- 
ment, discharging their liability to government for many mill- 
ions of money; and to accomplish this, imposing upon the 
people additional burdens and taxes for which no equivalent 
has beeo or ever will be given. The determination to plunder 
the government and people seems to control not only the 



66 MONOPOLLE8 AND TU£ PlsX>PLK. 

adventarerB, who go to Washingtx)]! to lobbj their fichemes 
through congresfi, but also congresBmen themselveB, who become 
chiefs among this class of money and land grabbers. They vote 
to the corporations, of which they are a part, large sums in 
money and lands, and then use the means thus obtained for 
the purpose of bribing and corrupting their fellow members 
in &yor of other and larger robberies 



OHAPTEB VI. 

HOW THB LAim 6SAI!rr BAELBOADS ^^DXVELOP'^ A OOUNTBY. 

T'HE ostenfiible object in grantmg lands to railroad compa- 
nies was to aid new and nndeveloped portions of the 
country in procuring necessary railroad facilities for com- 
munication with the rest of the world; and to assist, by 
donations of alternate sections, in their development and set- 
tlement 

Whether these ends have been achieved is a matter of doubt. 
It is scarcely to be hoped that the people will ever be reim- 
bursed for the vast extent of lands, and large amount of bonds, 
which have been so recklessly lavished upon so many railroad 
companies. When the proposition to grant lands to railroad 
companies was brought before congress, the right to donate 
them to private corporations was not admitted; the right of 
the states to have control of the lands was not questioned. 
Recognizing this latter right, the lands were granted to the 
states for the purpose of aiding in the construction of certain 
roads within their borders. It was not until 1862 that con- 
gress came to the front, created private railroad corporations, 
and endowed them with lands and money. !Nor did these 
corporations commence their wholesale raid upon the public 
treasury until after congress went into the business of creating 
railroad companies. Is it true that the country has been 
benefited in proportion to the grants made? Are the people 
richer because of these grants? Has the country, as a general 
rule, been more rapidly settled and improved by this railroad 
legislation? We are aware that the idea is commonly enter- 
tained that the people receive an equivalent for these railroad 
grants in the increased facilities for travel and transportation 
of freiglits. Were it trno that the roads receiving grants ot 
land were more speedily constructed, or that transportation 

(67) 



58 MONOFOLEBS AND THE PBOPLB. 

over them was less expensive, then we would admit that the 
benefits derived would in some degree be an equivalent for the 
aid afforded them. To ascertain the facts, let us see how this 
legislation has afiected the west, taking Iowa and Kansas as 
illustrations. 

In the first place, for every acre of land given to railroads 
in these states the people have paid $1.25, inasmuch as they 
are charged $2.50 for the reserved alternate sections. Taking 
the land granted in Iowa, the amount charged to the people 
of this state is $9,009,841 ; or, taking the grants already certi- 
fied to^ the people are charged with $4,387,303. This sum, 
amounting to about $4.00 per liead, has been taken from the 
people of Iowa and given to railroad companies, and must be 
charged against the benefits received. The construction of 
about eleven hundred miles of railroad in Iowa was aided by 
land grants. The cost, at $30,000 per mile, would be less than 
$38,000,000. The amount the people are obliged to pay into 
the public treasury for the reserved sectioiis^ in making up the 
account should be charged to the land grant roads, as also the 
increased price they are compelled to pay the companies for 
the donated lands, which range from $5.00 to $50.00 per acre; 
and this, t<X), of lands that under the general laws they could 
have entered at $1.25 j>er acre. 

• The amount taken from the people who settle in and 
improve the state and develop its resources, which they must 
pay to the government and these railroad companies before 
getting title to their lands, is about $25,000,000 more than 
would have been demanded of them but for these land grants. 
Wliat have they received in return? The companies in Iowa 
receiving grants of land have not extended their lines across 
the state more rapidly than companies receiving no grants. 
In fact, roads built entirely with private means have been 
constructed more rapidly than these land grant roads. The 
companies receiving the grants did not keep pace with the 
settlement of the country; the people, as pioneers, were always 
in advance of the roads. It was only when the population of 
the country was sufficient to afford a paying business that the 
roads were extended. The excuse paraded by congress for 



DO LAND OBANTB ^^DEVELOP" A COUNTRT t 59 

making these grants was that the companies would advance 
their roads so as to draw after them an agricultural popula- 
tion. This has not been done. On the contrary, the lands 
outside of the boundaries of the railroad grants were the first 
settled, aud the most rapidly developed. Has the result been 
different in Kansas? The number of miles of railroad in this 
state in 1870, was about seventeen hundred, of which nearly 
one thousand received grants of land, and the Kansas Pacific 
company $6,308,000 in subsidy bonds. Companies construct- 
ing these roads received hmd grants to the amount of 
5,420,000 acres. At $1.26 per acre the grants amaunt to 
$6,775,000. This sum is charged upon the reserved sections, 
as in Iowa, and must be paid by the people of Kansas. Add 
to this the $6,303,000 subsidy bonds, and the Kansas railroads 
have cost the people of that state and the public treasury 
$13,000,000, outside of the immense local aid voted to them 
by the different cities, towns and counties. The population 
of this state in 1860, was 107,206. In 1870, it was 362,872. 
Saying nothing about the increased prices to be paid to the 
railroad companies for the lands granted to them, or the large 
amount of subsidy bonds, and leaving out the immense 
amounts of local aid afforded to the different railroads, and 
the sum to be charged to the railroads for the extra price of 
the reserved sections is about $20.00 per head for the entire 
population. Looking at the facts as they are developed, we 
conclude that the people have not been benefited by these 
grants of lands, that railroad companies are the only parties 
benefited, that the people are not richer because of these 
grants, but on the contrary they would have made money by 
giving to the railroad companies the actual cost of the roads. 
Has the country been more rapidly settled and improved by 
reason of this special legislation? The leading idea advanced 
in favor of grants to railroad companies, has been their neces- 
sity in developing the new states and territories. We are 
pointed to the new states of Iowa, Minnesota, Nebraska, 
Kansas and Nevada, and the ten*itories of Cokirado, Utah and 
Wyoming, and referred to the fact that these states have a 
population of 2,874,000, and 9,000 miles of raihx)ad; and from 



60 MONOFOLDBS AND THS PBOFUL 

thifl exhibit an argument ib deduced in favor of theae grants. 
The theory is that the population has followed the roads. Is 
diis theory correct? In 1850 Iowa had a population of OTS^dlS, 
and in 1870 a population of 1,191,729. In 1860 there were 
666 miles of railroad, about three-fourths of which had 
received grants of land. In 1870 the number of miles of 
railroad had increased to 2,668. Of this increase not more 
than one-third was aided by land grants, private enterprise 
having constructed at least two- thirds of it; and the same 
kind of enterprise is still at work, and since 1870 has increased 
the ixumber of miles to 3,250. The land grants were nearly 
all made to Iowa in 1856, yet the energetic and rapid building 
of roads was not shown until after the close of the war« nor 
until the people had advanced beyond the roads, and their 
necessities demanded them. Kansas, in 1860, had a popula- 
tion of 107,209. In 1870 it had increased to 364,400. Prior 
to 1864 it had no railroads. In 187X) it had 1,501 miles, all 
of which, save forty miles, was built in four years. Nearly 
all of the Kansas roads were aided by grants, and some of them 
by subsidy bonds. In 1870 there was one mile of railroad in 
Kansas for every 242 inhabitants. To construct these rail- 
roads in £[ansa8, counties, cities and towns have taxed them- 
selves by vote to the aiuount of $4,400,000, or about $9.00 to 
each inhabitant. This debt must be charged to the railroad 
account, and a similarly voted indebtedness in Iowa to the 
amount of about $6,000,000. The valuation of property in 
Iowa, in 1860, was $205,166,000, and in 1870, $302,516,000. 
Thus, while the population of the state had nearly doubled, 
and the lines of railroad had more than quadrupled, the valu- 
ation had increased less than fifty per cent., and at least one- 
half of this increase was in the value of railroads. Deducting 
from the increased valuation of property in Kansas the value 
of railroads there, and about the same state of facts appears. 
The figures in these two states will show that so far from the 
donations of land and money adding to their wealth, the 
reverse is true. And this position is supported by the exhibit 
of other states. In Pennsylvania tlie population has increased 
since 1860, 600,000. The mileage of railroads has nearly 



/ 

DO LABD OBANTS ^^DEVSLOP" A OOUNTBT t 61 

doabled in Uns time, and the valnation of property has 
inereMed from $717^53,000 to $1,318,236,00«. In that state, 
where no goyemment aid has been voted to raiboads, the 
wealth of the state has nearly doubled, while in the same time 
in the state of Iowa it has not increased fifty per cent., land 
gnats indnded. 

The population of Nebraska has increased from 7,000 to 
4S,000 in the last decade. This state has 593 miles of railroad, 
or one mile of railroad to each seventy of its population, nearly 
all aided by grants. 

California had a population in 1860 of 380,000. In 1870 it 
had increased to 560,000. 

Colorado in the last decade increased from 34,000 to 40,000. 
In this territory there are 392 miles of railroad, all built by 
gnmts of lands and bonds. 

Of course the roads through the territories are the Pacific 
roads, but as the states and territories were both cited as illus- 
IrationB of the wisdom of congress in making grants to com- 
panies for the construction of railroads, we have examined the 
matter somewhat in detail to show the weakness of the argu- 
ment. K we take the census of 1860 and that of 1870 and 
observe the increase in population, wealth and railroad build- 
ing, we will discover that the laws of trade, of supply and 
demand have controlled the whole matter, and that the growth of 
the country has not been increased because of these grants from 
government In all cases where the construction of railroads 
has approached the frontier line of settlement, it has drawn 
but little population after it, aside from the employes of the 
road. The real pioneer immigration, that which opens and 
improves the country, is doing now what it has done for the 
last generation, moving steadily to the west, followed and sur- 
rounded by railroad sharks and jobbers, who, aflber getting 
all they can from the government, prey upon the people; and 
the people of the new states, instead of being blessed with the 
means of adding to their wealth, find themselves burdened 
with debt and taxes, fastened upon them by the construction of 
railroads, many of which are of doubtfril utility. As a necres- 
•ary conaequence of the railroad taxes upon their lands, and 



68 MONOPOLIES AND THE FBOFLE. 

the excessive charges imposed for the transportation of their 
produce their farms do not appreciate in value, and the antid!- 
pated rapid increase in population and wealth of the locality la 
not realized. From a view of the whole situation, r^ard^ng 
the benefits accruing to the people from these grants to rail- 
road companies, with what the people have paid for them, the 
withholding of these railroad lands from market, and the high 
prices charged per acre by the companies, together with the 
unjust privileges granted to these corporations, we condnde 
that the people of the new states and territories have not 
received an equivalent for the grants made to railroad compa- 
nies. We are aware that a different opinion prevails, and that 
our conclusions will be controverted; but when it is remem- 
bered that thousands of people have left Iowa, or, coihing from 
the east have refused to settle in Iowa, because of the fistct that 
lands could only be had by purchase irom railroad companiea 
at extravagant prices, and that for this reason vast tracts of 
Iowa lands are yet unimproved which would now be Mttled 
upon and cultivated had they not thus been withdrawn from 
the market, it must be admitted that Iowa would have had a 
greater population, and greater wealth, had her railroad com- 
panies received no land grants. And what is true of Iowa is 
also true, as a general rule, of other states and terntories. 
Perhaps an exception exists in the far western territories whose 
gold and silver mines are in themselves an exception to the 
general rule, and where agriculture has but few foUowars. 

Tlie advocates of the railroad land grant and subs7*iy bond 
system for the settlement of a country have the following to 
say in its favor. We qnote from the Railroad Manual before 
referred to: " One of the most remarkable things connected 
with the progress of this country is the construction of rail- 
roads in advance even of the lines of settlement of our people. 
Such result is largely due to the grants made by government 
of lands for the encouragement of these works. Never was a 
policy more wise or more beneficent." No instances can be 
shown where railroads have been built in advance of the line 
of settlement, save when the objective point could only be 
reached by passing over an unsettled country, as in the case of 



DO LAND GRANTS " DEVELOP " A OOTJNTBT t 68 

the road from the Atlantic to the Pacific states. In all other 
eases, railroad companies have awaited the settlement and 
development of the country, and followed, not led, our pioneer 
corps. Of the wisdom and beneficence of these grants the 
people can judge from their acquaintance with the workings of 
the system, and the wholesale robberies and frauds practiced 
by the companies, to some of which we have already referred. 
Again the author says: "The government has been greatly 
the gainer in a pecuniary point of view, as it was enabled to 
sell the land reserved at twice the established rate." It is not 
clearly seen how this gdvn is made. The people, who are the 
government, give away one-half of their lands, and then pay 
into thieir treasury just money enough for the remaining half 
to mike up the value of the lands they have given away. The 
only gain the government has made (and this is not a pecuniary 
one) is the reflection that the men who have received these 
large grants have become rich, while the people have been 
deprived of their lands at the original price; they must pay for 
one-half of them a double price, and for the residue just 
what they can buy it for from the corporatiouB to whom their 
servants have donated it. This author says : " That the pub- 
lic has reaped the advantage of the construction of some 
ten thousand miles of railroads, that otherwise would not have 
been built." Is this true? In Iowa the land grant roads were 
not built as fast as other roads having no grants, and the com- 
panies finally completed them because they were about to lose 
their lands by longer delay. And in other states and territories 
some of these land grant roads are dragging their slow length 
along, and are being constructed only as fast as the lines are 
settled with a sufiicient number of inhabitants to make the 
business of the roads profitable. Afler showing that in certain 
states and territories there is no^^ one mile of railroad for each 
three hundred inhabitants, the author adds: " This is certainly a 
most wonderful exhibit, and is one no other nation can display, 
and which in our case has only been secured by the wise, benev- 
olent policy of our government, which in this way did more to 
give remunerative employment to the poorer classes than any 
other legislation could adopt." It is certainly a " most wonder- 



64 MONOPOLIES Ain> THB FBOFLB. 

fuL exhSbit?^ It is one that ^^no other nation can dUplay; " 
but its wisdom and benevolence are matters of grave doubt. 
If we add to this ^^wonderfol exhibit " the $65,000,000 stolen 
from the people by cormpt men and interested legislation, with 
the $3,126,000 annual interest that the whole people are taxed 
to pay, because the Pacific railroad companies and the con- 
gressional Credit Mobilier have wrongfully appropriated this 
vast sum to their own use, it presents truly '^ a most wonder- 
ful exhibit," without a parallel in any country in the world, 
but its wisdom and benevolence are certainly wanting. 



I 



OHAFTEK VII. 

THB CREDIT MOBUJZR, AND A YILLAINOXJ8 OONT&AOT 

WE now approach one of the grandest Bchemes for de- 
manding a people ever conceived in the breast of the 
speculator. Before considering the Credit Mobilier, and to 
ehow the ntter rottenness of the policy of affording con- 
gressioniil aid to railroads, indulge us in a brief re-survey of 
the subsidy bonds issued to the Pacific railroad corporations. 
We may concede that at the date of the original charter of 
these companies, there were no congressmen interested in the 
grand scheme, and that it was planned by outside combina- 
tions. The charter received various amendments with addi- 
tional aids and privileges after members of congress had be- 
come interested; these amendments were made while directors 
of, and contractors for, these Pacific roads were occupying 
seats in congress. Whether or not they voted for these amend- 
ments does not appear, but it is certain they did not oppose 
them. As we have already shown, the aid voted by congress 
was ample to build and equip these roads, taking the state- 
ments of the liaUroad Maivual upon the character of the 
country through which they pass, and the average cost of rail- 
roads as the basis for. our conclusion. The companies could 
have built the roads without using the capital stock they re- 
ported as paid up. The Union Pacific has made no public exhibit 
of the cost of its portion of the roads, and from this fact we are 
at liberty to infer that an honest ex] libit would present a bad 
look. Facts enough have been disclosed to prove that the 
stockholders and directors of the Union Pacific company had 
formed a combination for the purpose of defrauding the gov- 
ernment and the people. The letting of the contract for the 
oonstmction of its division of the roads presents one of the 
moBt perfect combinations for private speculation at the ex- 

(66) 



66 MONOFOLIR8 AND THE PEOPLE. 

pense of the public that was ever planned or executed. When 
this division was completed, according to the statements of 
the company, it was indebted in the sum of $112,911,512. The 
cost of the whole line of road, at the highest price per mile 
given, to wit: $50,000> would amount to less than one -half 
of the reported indebtedness of the company, including the 
paid-up capital reported as $37,000,000. To show what was 
done with the subsidy bonds issued to this company, we must 
look at the contract made by the directors with Oakes Ames 
for the construction of six hundred and sixty-seven miles of 
the road, and the subsequent transfer of this contract to the 
Credit Mobilier of America. Let us remember that, in addi- 
tion to the bonds issued by the government to the amount of 
$16,000 per mile for a part of the road, $32,000 per mile for a 
part, and $48,000 per mile for a part, congress, by a subse- 
quent amendment to the charter, allowed the company to issue 
its own bonds for a like amount per mile, as first mortgage 
bondS; and that at the time of making the contract now under 
consideration, the directors of the company and of the Credit 
Mobilier were the same persons, some of whom were at that 
time and since members of congress. With these facts before 
us, we can see the reason for the excess of the debts over the 
cost of the road, as well as for many of the peculiar features of 
this singular contract. The executive committee of the com- 
pany was composed of the following named persons: Oliver 
Ames (brother of Oakes Ames, contractor and member of con- 
gress), C. S. Bushndl, Springer Harbaugh, and Thomas C.Du- 
rant. The seven directors of the company who were made 
trustees, and who signed the transfer of the contract to the 
Credit Mobilier, were Thomas C. Durant, Oliver Ames, John 
B. Alley (a member of congress), Sidney Dillon, C. S. Bush- 
nell, H. S. McComb, and Benjamin E. Bates; and the president 
of the Credit Mobilier was Sidney Dillon. 

The grant of lands and bonds was made to the railroad com- 
pany, as well as the right to issue their first mortgage bonds. 
All of the contracting parties were directors in the railroad 
company, and in the Credit Mobilier. As a body they oon- 
tiolled the whole matter. If a desire to protect the best inter- 



THB OREDIT MOBUJEB, AND A VILLAINOUS OONTBACT. 67 

OBts of the company, and to deal honestly with the public, had 
actuated these men, and not a determination to plunder the 
public, no reason can be shown for this strange contract; but 
ii it was the intent of a combination of men to defraud the 
public and the government, then the contract and its assign- 
ments can easily be accounted for. All of the stockholders of 
the company, at the time the contract was made with Oakos 
Ames, by indorsement on the back of their certificates of stock, 
appointed the above named seven trustees, irrevocably to rep- 
resent their stock at all business meetings and elections of 
directors, during the existence of the Ames contract. The 
following is a correct copy pf the contract and assignments: 



GREDII MOBIUBB. 

Agssement made this 16th day oi August, 1867, between the 
Union Pacific railroad company, party of the first part, and 
Oakes Ames, party of the second part, witnesseth: 
That the party of the first part agrees to let and contract, 
and the party of the second part agrees to contract as fol- 
lows, to wit: 

First. The party of the second part agrees and binds him- 
self, his heirs, executors, administrators, and assigns to build 
and equip the following named portions of the railroad and 
telegraph line of the party of the first part, commencing at the 
one hundredth meridian of longitude, upon the following terms 
and conditions, to wit: 

1. One hundred miles at and for the rate of $42,000 per 
mile. 

2. One hundred and sixty-seven miles at and for the rate of 
$45,000 per mile. 

3. One hundred miles at and for the rate of $96,000 per 
mile. 

4. One hundred miles at and for the rate of $80,000 per 
mile. 

6. One hundred miles at and for the rate of $90,000 per 
inila 



68 MONOPOLIES AND THB FBOFLB. 

6. One hundred miles at and for the rate of $96,000 per 
mile. 

Second. At least three hundred and fifty miles shall be, if 
possible, cotnpleted and ready for acceptance before the fizdt 
day of January, 1868, provided the Union Pacific railroad earn- 
pany transport the material. The whole to be constructed in 
a good and workmanlike manner, upon the same general plan 
and specifications as adopted east of the one hundredth merid- 
ian of longitude. The party of the second part shall erect all 
such necessary depots, machine shops, machinery, tanks, turn 
tables, and provide all necessary machinery and rolling stock 
at a cost of not less than $7,500 per mile, in cash, and shall ' 
construct all such necessary side tracks as may be required by 
the party of the fi^t part, not exceeding six per cent of the 
length of the road constructed, and to be constructed under 
this contract. The kind of timber used for ties and in the 
bridges, and in its preparation, shall be such as from time to 
time may be ordered or prescribed by the general agent, or 
the company, under the rules and regulations and standard aa 
recommended by the secretary of the interior, of the date of 
February — , 1866. 

TM/rd. Whenever one of the above named sections of the 
road shall be finished to the satisfaction and the acceptance of 
the government commissioners, the same shall be delivered 
into the possession of the party of the first part, and upon such 
portions of the road as well as on that part east of the one hun- 
dredth meridian now completed, the party of the first 'part 
shall transport, without delay, all men and material to be used' 
in construction at a price to be agreed upon by the party of 
the second part, his heirs, executors, administrators or assignJBii 
and the general agent, but not less than cost to the party c^ 
the first part. 

Fowrth. The party of the second part, his heirs, executors, 
adnunistrators or assigns, shall have the right to enter upon 
all lands belonging to the company, or upon which the company 
may have any rights, and take therefrom any material used ' 
in the construction of the road, and may have the right to 
change the grade and curvature within the limits of the pro^' 



THX OBKDIT MOBILIEB, AlO) A YILLAINOnS OOBTRACT. 69 

TisioxiB of the act of congress for the temporary purpose of 
haatening the completion of the road; but the estimated cost 
of reducing the same to grade and curvatures, as established 
by the chief engineer, or as approved from time to time by the 
company, shall be deducted and detained by the party of the 
first part, until such grade and curvature is so reduced. 

Fifth, The party of the second part, his heirs, executors, 
administrators, or assigns, is to receive from the company and 
mjoy the benefits of all existing contracts, and shall assure aU 
such contracts and all liabilities of the company accrued or 
arising therefrom for work done or to be done, and material 
furnished or to be furnished, for or on account of the road west 
of the one hundredth meridian, crediting, however, the party 
of the first part on this contract all moneys heretofore paid or 
expended on account thereof 

Sixth. The party of the second part, for himself, his heirs, 
executors, administrators, and assigns, stipulates and agrees 
that the work shall be prosecuted and completed with energy 
and aQ possible speed, so as to complete the same at the earliest 
practicable day, it being understood that the speed of con- 
struction and time of completion is the essence of this contract, 
and at the same time the road to be a first-class road, with 
eqiiipments; and if the same, in the opinion of the chief 
engineer, is not so prosecuted, both as regards quality and dis- 
patch, that then the said party of the first part shall and may, 
through its general agent or other officer detailed for that pur- 
pose, take charge of said work and carry the same on at proper 
cost and expense of the party of the second part. 

Seventh. The grading, bridging, and superstructure to be 
completed under the supervision of the general agent of the 
company, to the satisfaction of the chief engineer, and to be 
of the same character as to the workmanship and materials as 
in the construction of the road east of the one hundredth 
meridian. 

It is, however, understood thi all iron hereatler purchased 
or contracted for, shall be of the we. ht of not less than fifty- 
six pounds to the yard, and to be fish ba. ioints. 

Eighth, All the expenses of the engiL ering are to bo 



70 MONOPOLDSB AliTD THE FBOFLX. 

charged and paid by the party of the second part, except the 
pay and salary of the chief engineer and consulting engineer, 
and their immediate assistants, and the expenses of the general 
survey of the route. 

Nvnih. The depot buildings, machine shops, water tanks, 
and also bridges shall be of the most approved pattern, and 
they, as well as the kind of masonry and other material used, 
shall be previously approved by the general agent and chief 
engineer of the company, and all tunnels shall be arched with 
brick or stone, when necessary for the protection of the same. 

Tenth, Payments to be made as the work progresses, upon 
the estimates of the chief engineer, in making which the engi- 
neer shall deduct from each section its proportion of the cost 
of equipment not then furnished, station buildings, super- 
structure, and cost of telegraph, but all materials delivered or 
in transit for the account of the company may be estimated 
for. 

Eleventh. Payments hereon shall be made to the party of 
the second part, his heirs, executors, administrators, or assigns, 
in cash ; but if the government bonds received by the company 
cannot be converted into money at their par value net, and the 
first mortgage bonds of the company at ninety cents on the 
dollar net, then the said party of the second part, his heirs, 
executors, administrators, and assigns, shall be charged thereon 
the diflFerence between the amount realized and the above- 
named rates; provided the first mortgage bonds are not sold 
for less than eighty cents on the dollar, and if there shall not 
be realized from the sale of such bonds an amount sufiicient 
to pay the party of the second part, his heirs, executors, 
administrators, or assigns, for work, as stipulated in this con- 
tract, and according to the terras thereof, then such deficiency 
shall from time to time be subscribed by said party of the 
second part, his heirs, executors, administrators, or assigns, to 
the capital stock of said company, and proceeds of such sub- 
scriptions shall be paid to ^ id party of the second part, his 
heirs, executors, admin v xators, or assigns, on this contract. 

Twelfth. On thr ^rst one hundred miles on this contract, 
there shall be ad ccd to the equipment now provided for and 



THS CREDIT MOBQJSS, AND A VILLAINOnS OONTKAOT. 71 

intended to apply on thig section as follows, viz. : Six locomo- 
tiyes, fifty box cars, fonr passenger cars, two baggage- cars, and 
a proportionate amount of equipment of like character be 
supplied to the second section of one hundred miles, after the 
same is completed. 

Thirteenth. The amount provided to be expended for 
equipment, station buildings, etc., shall be expended under the 
direction of the party of the first part, and in such proportion 
for cars, locomotives, machine shops, station buildings, etc, 
and at such points as they may determine; the party of the 
first part to have the full benefit of such expenditures without 
profit to the contractor, or they may, in their option, purchase 
the equipment and expend any portion of said amount pro- 
vided at any point on the road where they may deem the same 
most advantageous to the company, whether on the section on 
which said reservation occurs or not. 

Fourteenth. The telegraph line is included herein under the 
term ^ railroad," and is to be constructed in the same manner 
and with similar materials as in the line east of the one 
hundredth meridian. 

That said parties hereto, in consideration of the premises 
and of their covenants herein, do mutually agree, severally, to 
perform and fulfill their several and respective agreements 
above written. 

His contract having been submitted to the executive com- 
mittee by resolution of the board of directors, August 16, 
1867, and we having examined the details of the same, recom- 
mend its execution by the proper officers of the company with 
the Hon. Oakes Ames, the party named as the second part. 

OlTVEB AmwRj 
G. S. BuSHNKLL, 

Springeb Hakbaugh, 
Thomas C. Dueaih', 
BxeouUve Committee Union Pacific Bail/road Oom/pany, 

Beeolvedj The foregoing contract between the Union Pacific 
railroad company and Oakes Ames, referred to the executive 
committee by a resolction of the board, August 16, 1867, to 
settle the details, be approved, and that the proper officers of 



7S MONOPOLIES AND THE FBOFLB. 

tiie oompany be instracted to ezecnte the same, subject^ bow- 
ever, to the written approval of the stockholders of the oom- 
pany, as understood by the board of directors when the same 
was voted upon. 

JReaolvcdj That the option to extend this contract to Salt 
Lake be referred to the board, with recommendations that said 
option b^ accepted. 

ASSIONKENT OF CONTRACT TO SEVEN TBI78IEEB. 

Hbmokanduh of aoreement — IN TRiFLioATE : Made this 15th 
day of October, 1867, between Oakes Ames, of North 
Easton, Massachusetts, party of the first part; Thomas 0. 
Dnrant, of the city of New York; Oliver Ames, of North 
Easton, Massachusetts; John B. Alley, of Lynn, Massachu- 
setts; Sidney Dillon, of the city of New York; Cornelius 
S. Bushnell, of New Havefti, Connecticut; Henry S. Mc 
Comb, of Wilmington, Delaware; and Benjamin E. Bates, 
of Boston, Massachusetts, parties of the second part; and 
the Credit Mobilier of America, party of the third part; 
that 

Whereas, The party of the first part has undertaken a cer- 
tain large contract for the construction of certain portion 
therein named of the railroad and telegraph line of the Union 
Pacific railroad company over the plains and through and over 
the Rocky mountains, which will require a very large and 
hazardous outlay of capital, which capital he is desirous to be 
assured of raising, at such times, and in such sums as will 
enable him to complete and perform the said contract accord- 
ing to its terms and conditions; and 

Whereas, The Credit Mobilier of America, the party of the 
third- part, a corporation duly established by law, is empowered 
by charter to advance and loan money in aid of such enterprises, 
and can control large amounts of capital for such purposes, 
and is willing to loan to said party of the first part sijch sums 
as may be found necessary to complete said contract, provided 
sufficient assurance may bo made to said party of tlie third 
part therein, that said sums shall be duly expended in the 



THE OBXDIT yOBn.TKB, AND A yXLLAINOISI OOHTRACT. 7S 

work of oompleting «aid railroad and telegraph line, And, 4i|kt 
the pajmants for the faithful performanoe of «aid contractrby 
laid railroad company shall be held and i^ppUed to reimburse 
said party of the third part for their loan^^ and. ad^^l^BiOe^i 
together with a reasonable interest for the use of the money 
BO loaned and advanced; and 

Whereas, Said party of the third part fnUyitbc^vjea that 
said contract, if honestly and faithfully executed, will be bath 
profitable and advantageous to the parities^ p^rtbrmjpgM.the 
same, and therefore willing to guarantee the performanea^Ad 
execution of the same for a reasonable commissioB to^ be paid 
therefor; and 

Whxbeas, Both parties of the first and third part« bs^v^e 
confidence and reliance in the integrity, businesa cap^dtjTi and 
ability of the several persons named as parties of the second 
part hereto, and confidently believe that said persona have 
large interests as well in the Union Pacific railroad . company 
as in the Credit Mobilier of America, they will execute and 
perform the said contract, and faithfully hold the proceeds 
thereof to the just use and benefit of the parties entitled 
thereto: 

Therefore, It is agreed by and between the said parties of 
the first, second, and third parts hereto as follows; that is to 
say: 

That said Oakes Ames, party of the first part hereto, hereby, 
for and in consideration of $1.00 lawful money of the United 
States, to him duly paid by the party of the second part, and 
for divers other good and valuable considerations herein, there- 
unto moving, doth hereby assign, set over, and transfer unto 
the said Thomas C. Durant, Oliver Ames, John B. Alley, 
Sidney Dillon, Cornelius S. Bushnell, Henry S. McComb, and 
Benjamin K Bates, parties of the second part, all the right, 
title and interest of, in, and to, the said certain contract here- 
tofore made and executed by and between the Union Pacific 
railroad company and the said Oakes Ames, bearing date the 
16th day of August, 1867, for the construction of portions of 
the raib\>ad and telegraph line of said railroad company, to 
irlucb<.copatra^ ireferenioe ia herein xnade fpr them^otbe «aid 



74 MONOFOIJIS AND THB FBOFLB. 

parties of the second part, to have and to hold the aame ta 
them and their snrvivors and successors forever in trust. 

Ifevertheleaa^ Upon the following trusts and conditions and 
limitations, to-wit : 

1. That they, the said parties of the second part, shall 
perform all the terms and conditions of said contract so 
assigned in all respects which in and by the terms and condi- 
tions thereof is undertaken and assumed and agreed to be 
done and performed by the said party of the first part herein 
named. 

2. That they, the said parties of the second part, shall hold 
all the avails and proceeds of the said contract, and therefrom 
shall reimburse themselves and the party of the third part 
hereto, all moneys advanced and expended by them, or either 
of them, in executing or performing the said contract, with 
interest and commission thereon as hereinafter provided. 

3. Out of the said avails and proceeds to pay unto the 
parties of the second part a reasonable sum as compensation 
for their service, as such trustees, for execating and performing 
the terms and conditions of this agreement, which compensa- 
tion shall not exceed $3,000 per annum to each and every one 
of the parties of the second part. 

L To hold all the rest and residue of the said proceeds and 
/ avails for the use and benefit of such of the several persons 
holding and owning shares in the capital stock of the Credit 
Kiobilier of America on the day of the date hereof, in propor- 
tion to the number of shares which said stockholders now 
severally hold and own, and for the use and benefit of such of 
the assignees and holders of such shares of stock at the times 
herein set forth, for the distribution of said residue and 
remainder of said avails and proceeds, who shall comply with 
the provisions, conditions, and limitations herein contained, 
whidii are on their part to be complied with. 

5. To pay over on or before the first Wednesday of June 
and September each year, or within thirty days thereafter, hia 
just share and proportion of the residue and remainder of the 
said proceeds and avails as shall be justly estimated by the said 
tmtteea to have been made and earned as net profit on said 



THS OBBDIT MOBUJEB, AND A yiTJAINOUS OOlflTRAOr. tS 

contract, during the preceding six months, to eiMsh shareholder 
only in said Credit Mobilier of America, who being a stock- 
holder in the Union Pacific railroad shall have made and 
executed his power of attorney or proxy, irrevocable, to said 
several parties of the second part, their survivors and success- 
ors, empowering them, the said parties of the second part, to 
vote upon at least six tenths of all the stock owned by said 
shareholders of the Credit Mobilier of America, in the capital 
stock of the Union Pacific railroad company, on the day of the 
date hereof, and six tenths of any stock in said Union Pacific 
railroad company he may have received a dividend, or other- 
wise, because or by virtue of having been a stockholder in said 
Credit Mobilier of America, or which may appertain tb any 
shares in said Union Pacific railroad company, which had been 
80 assigned to him at the time or times of the distribution of 
the said profits as herein provided ; and this trust is made and 
declared upon tlie express condition and limitation that it 
shall not enure in any manner or degree to the use or benefit 
of any stockholder of the Credit Mobilier of America who 
shall neglect or refuse to execute and deliver unto the said 
parties of the second part his proxy or power of attorney, in 
the manner and for the purpose hereinbefore provided, or who 
shall in any way, or by any proceeding, knowingly hinder, 
delay, or interfere with any execution or performance of the 
trust and conditions herein declared and set forth. 

And the above transfer and conveyance of said contract is 
made upon these further trusts and conditions, to-wit: 

1. The eaid parties of the second part, their survivors and 
successors, trustees as aforesaid, in all their acts and doings in 
the execution and peribrmance of said contract, and in t^e 
execution of their several trusts and conditions herein set forth, 
shall act by the concurrent assent of four of their number, 
expressed in writing, or by yea and nay vote, at a meeting of 
said trustees, either or both of which shall be recorded in a 
book of proceedings of said trustees, kept for the purpose by 
their secretary, and not otherwise. 

S. Said parties of the second part shall keep an office in 



79 MOKOPOIIBB AJSfD TEE FBOIXX. 

the city of New York for the transaction of the bosineae inol* 
dental to said tmst Meetings of said trustees maj be held am 
call of the secretary on request of any two of their number; 
such call may be made personally or by maiL 

3. The said trustees shall appoint a competent peracm a« 
secretary, who shall keep a faithful record of all their acts, pro- 
ceedings, and contracts, in books to be provided for that pur- 
pose, and shall cause to be kept suitable books of accounts and 
vouchers of all their business transactions, which books shall at 
all times be open to the inspection of any of said trustees. 

4. The said trustees shall cause a monthly statement to be 
made, showing the amount due from the Union Pacific railroad 
company on account of work done or equipment or material 
furnished under the contract, accordiAg to the estimates of the 
engineer of the Union Pacific railroad company, as provided 
in said contract, a copy of which statement shall be furnished 
to the Credit Mobilier of America. 

And the above transfer and conveyance of said contract is 
made upon the further trust and condition : 

1. That in case of death, declination, disability, by reascm 
of sickness or absence from the country for the space of six 
months, or neglect to fulfill the duties and obligations of said 
trust for the same time by either of said trustees, the remain- 
ing or surviving trustees may declare the place of said trustee 
to be vacant, and to fill such vacancy by vote in manner 
aforesaid. 

2. That in case any one of said trustees shall wilfully 
neglect or evade the performance of his duties as such trustee, 
or shall wilfully attempt to hinder, delay, obstruct, or interfere 
with the execution or performance of said contract, or the due 
execution or performance of said trust and conditions, accord- 
ing to the true intent thereof, or shall appropriate to his own 
use or benefit any money or other valuable thing belonging or 
appertaining to said trust, fund, or property, he shall not be 
entitled further to act as such trustee, or to receive any of the 
benefits of said trusts, either as shareholder in said Oredit 
Mobilier of America, or otherwise. 

^Diapartiea of the eeeond part do hereby aooept Hie mid 



GHEDrr^emxixs, AHt^A vniJtnSnm oohtraot. 77 

timiV^^ i%i^ faitlifollj to execute and perfoiin fllt^ ftaixto 
IMdtd!]^;^t6 thld teirtkiSy conditionB, and limitations herein set 
forth. 

The party of <he third part, in consideration of the premises, 
hereby 4^;)^ia advance, as upon a loan, to the said parties of 
the second part, their survivors and successors, all such sums 
of money, and at snch times as may be necessary, to enable 
said trosteee, economically and promptly, to execute and per- 
forte the conditions of said contract, upon the call of said 
parties of the second part, their survivors and successors, such 
sums never to exceed in the whole the amount provided for 
in said contract, to be paid by the Union Pacific railroad com- 
pany, for the execution and performance thereof, and to receive 
therefor interest at the rate of seven per cent, per annum, 
payable semi-annually, on each sum so advanced, until the 
same are repaid. 

And said party of the third part do further agree, for the 
consideration aforesaid, and for an amount equal to two and 
one-half per cent on the amount to be by them advanced, to 
be paid to them as commission, do hereby guarantee unto the 
parties of the first part and second part, the <lne performance 
and execution of the said contract, according to its terms and 
tonditions, and do indemnify and hold harmless the said 
parties of the first and second part of and from all cost, lia- 
bility, loss or damage to them, or either of them, arising from 
or on account of said contract, and to the faithful performance 
of the agreement, contracts and conditions herein above speci- 
fied to be done and performed by each. 

And this conveyance and transfer is made upon the further 
trust and condition — 

That the trustees shall adjust and pay over to the Credit 
Mobilier of America such portion of the net profits of the work 
done and material furnished on the first one hundred miles 
west of the one hundredth meridian as was done and performed 
prior to January, 1, 1867. 

In witness whereof the party of the first part, the several 
potieBof the second part, in their own proper personsj hav9 
hMMmto'ieitlleir hands and seals, and the party of theiUfd 



78 MDNOFOLIB8 AND THB PBOFUi. 

part has caused these presents to be executed by its preBident^ 
attested by its secretary with the seal of the said company, on 
the day and year above written. 

Oakeb AifiBiy 
Thomas 0. DuRAjn^ 
Oliver Ames. 
John B. Allkt, 
SiDN£Y Dillon, 
Cornelius S. BushnsUii 
H. 8. MoCoMB, 
Benjamin £. Bates. 
Signed, sealed, and delivered in presence of Clask Bell. 
The Credit Mobilier of America, by its president, 

8ll>NE7 DiLLOV. 

Attest: Benjamin F. Ham, 

Assistant Secretary. 

The first noticeable feature of this instrument is that the 
directors of the company contract with one of their own body 
to build six hundred and sixty-seven miles of its road. 

Second, that they agree to pay to one of their own body 
nearly double the actual cost of the work. Aside from these 
fiacts, nothing striking appears in the contract. It is dated 
August 16, 1867. It was approved by the directors, and on 
the 15th of October following, only two months after its exe- 
cution, it was assigned to the seven trustees for the considera- 
tion of one dollar and divers other good and valuable consid- 
erations. These trustees agree to perform Oakes Ames' con- 
tract, but upon consideration that they shall hold all the avails 
and proceeds of the contract, reimburse themselves and the ' 
Credit Mobilier for all money expended on said contract, witli 
interest and commission, and reserve to each of themselves 
$8,000 per year for services. The trustees are to hold all of. 
the residue for the several persons possessing and owning 
stock in the Credit Mobilier, or to their assigns, but upon con- 
dition that all stockholders in the Pacific railroad company, 
who own stock in the Credit Mobilier, shall give an ineyooable 



THS OQBBDIT HOBCUKB, AKD A YILLAISOUS OOHTBAOT. 79 

'proxy for their railroad stock to the truBtees named in the 
agreement. The Credit Mobilier is to advance at Beven per 
cent, the money neceBsary for the prosecntion of the work, and 
Ibr a oommiBsion of two and one-half per cent., agrees to save 
liarmlesB the parties of the first and second part from all loss 
or damages to theifi, or either of them, arising from, or on 
aoconnt of said contract. The contracting parties are all stock- 
holders and directors in the railroad company, and in the 
Credit Mobilier, (whatever that may he^) they are tmstees for 
themselves. Th^ loan to themselves the money they receive 
as a grant from government, (voted to the railroad corporation 
while a part of their own members were members of congress;) 
they pay themselves seven per cent, interest for loaning to 
themselves their own money; also two and one-half per cent 
commission for ftimishing this money, donated by government, 
to themselves, besides $3,000 per year each to themselves for 
their services in this most extraordinary transaction. In 
order to have fnnds with which to compensate themselves, 
they issne the first mortgage bonds on the road of the Union 
Pacific company to the amount of many millions, and then ask 
congress to relieve them from interest on the bonds received 
from government; and congress, composed in part of the per- 
flona signing the above quoted contract and assignment, relieves 
the company from $3,125,000 per year, for thirty years, and 
taxes the people with this vast sum, because the government 
requires '^a mare mfe and speedy transmission of the mails, 
troops, etc, across the territories to the Pacific coast." We 
have nothing to do with the financial operations of this com- 
pany, only as far as the people are affected by them. Bearing 
in mind that the eight persons concerned in and signing this 
contract and assignment, were all directors of the Union Pacific 
railroad company; that four of them were the executive com- 
mittee; that one of them was the contractor, and all of them 
stockholders in the Credit Mobilier, probably at that time oon- 
stitnting that entire corporation; and that seven of them were 
tnmtees for some persons, company, or corporation, or what 
appears still more probable, for themselves, and Oakes Ames, 
Ifaa eontni^or, and we can accx>unt for the wholesale . rob]^^ 



80 ii6SMKftJtB''Aitif^^rsk' PiUtMM, 

of th^ p^e; per][veti^tea by thes^ eigbt mto, wil9r th0 «!A tf 
66iigr^;ft^1tb6V€J shown. 

But how the five non-stockholding directors, appointed by 
the president, who are presumed to act for the government 
and its interest, could have been ignorant of the whole matter, 
is not so easily understood. The act of congress of July 2, 
1864, section 13, provides: 

'' That at least one of said government directors shall be 
placed on each of the standing committees of said companyi 
and at least one on every special committee that may be 
appointed. The government directors shall, from time to 
time, report to the secretary of the interior, in answer to 
inquiries he may make of them touching the condition, maiir 
agement, and progress of the work, and shall communicate to 
the secretary of the interior, at the same time, such informa- 
tion as should be in the possession of the department. They 
shall, as often as may be necessary for a full knowledge of the 
condition and management of t^e line, visit all portions of the 
line of road, whether built or surveyed, and while absent from 
home, attending to their duties as directors, shall be paid their 
actual traveling expenses, and be allowed and paid such reason- 
able compensation for their time actually employed as the 
board of directors may decide." 

If these government directors and the company observed 
the law, then one of them was on the. executive committee of 
th^ Union Pacific company and must have known of this 
fraadulent contract and its assignment. If no one of them 
was placed on the executive committee, then, in the discharge 
of their daty^ they should have reported the facts to the secre- 
taty of the' interior. One of two inferences is irresistible: 
Ist, That they were ignorant of what it was their duty to 
know, or 2d, That they were unfaithful to the public trust 
oonfided in them. 

Follow XXB a litde further into this Oredit Mobilier organiu- 
tioB. It was first tirganized in Pennsylvania, as the Pemisyl- 
Tania Fiscal Agency for the buying and selling of raikoad 
bonda, adfmoing loans to railroads and oontiwctorsy and-tado 



THB GREDrrlMMMLnO^ AHD A rBJtABMfS OONTRACT. 81 

mbttoet liny kind of btLBmess esccept banking. The i^faarter was 
IZfianted in 1860 to Duff Green and some fifteen others, but 
included none of the Ol^it Mobilier company. In 1864, (the 
corporation having done nothing up to this time,) the secretary 
of the company supposing Duff Green, (the president,) to be 
dead, sold out the charter to George Francis Train, Thomas 0. 
Durant, Oakes Ames, Oliver Ames, and others, and Train bap- 
tized it with the new name of, "The Credit Mobilier of Amer- 
ica;" and then George Francis seems to have disappeared. It 
does not appear that any considerable amount of the capital 
stock was ever paid in, (the whole capital stock being 
$5,000,000;) perhaps just suflScient to legalize their operations, 
to-wit, $25,000. The first business done, of which there is any 
record, was a contract made by the directors of the Union 
Pacific company with one Hoxie, of Iowa, for building 247 
miles of the road, at what price per mile we cannot learn. It 
was not intended that Hoxie should build this road, but, as the 
directors of the company could not contract with themselves, 
it was arranged to contract with Hoxie, and then to set the 
Credit Mobilier to " running," and divide the spoils. With 
the consent of the executive committee of the company, Hoxie 
assigned his contract to the Credit Mobilier. The first mort- 
gage bonds of the company were sold, and suflScient realized 
to build forty miles of road in 1865, and in 1866 to complete 
the Hoxie contract. From the subsidy bonds received from 
government, or from some other and unknown source, the 
Credit Mobilier, in the year 1867, reported a paid up capital 
stock of $3,750,000, and were ready for extensive operations. 
In pursuance of the plan formed by the executive committee 
of 'the railroad company and the owners and directors of the 
Credit Mobilier, the contract with Oakes Ames, herein copied, 
was made, and then assigned. The Credit Mobilier was so 
used as to <:^ good. It was " placed where it would do the 
most good." It does not appear that this corporation had 
any considerable financial transactions, or did any particular 
business save in connection with the Pacific road; yet it 
proved to the holders the most prolific stock of any on record. 
The Ames contract was assigned to Sidney Dillon, and others, 
6 



88 HONOPOLEBS ASD THB FBOFLB. 

trustee^ on the 15th of October, 1867. It declared dividendB 
as follows: 

Dec. 13, 1867, Union Pacific RR bonds, valued at 12,700,000 

Jan. 8, 1868, " a « « »* 637,500 

June 17, 1868, " " " " " 525,000 

Junel7, 1868, cash 2,250,000 

July 8, 1868, *• 1,125,000 

Total of dividends in seven months $7,287,500 

In addition to the above, another dividend was declared July 
8d, 1868, of $2,390,625 in bonds, which were prononnoed 
bogus or worthless. It is thus seen that the directors of the 
Pacific railroad company, who were also the Credit Mobilier — 
trustees for themselves, and some of them members^of congress 
— ^by the aid of congressional legislation, and the fiction of the 
Credit Mobilier, contracted with themselves, agreeing to pay 
themselves extravagant prices for building their own road, and 
getting their pay as a donation from the public treasury, and 
were able in seven months to declare dividends to themselves 
of nearly two hundred per cent upon the reported paid up cap- 
ital, which capital was also obtained from the government. If 
the reader has followed us in the statements we have made 
relative to the land bond subsidies granted to the Pacific rail- 
road companies, he will not wonder that the indebtedness of 
these companies, after the completion of the road, and after 
the receipt from the government of more than their entire 
cost, nearly doubles the amount necessary to build them, had 
honesty and economy been used in their construction. 

We might pursue this subject further, but we think enough 
has been shown to convince the impartial reader, that what- 
ever the pretence for making these grants, the real object -has 
been to enrich unscrupulous and dishonest men at the expense 
of the public; and that this corrupting power has become so 
great that those who occupy high and responsible places in the 
government have become partners in these wholesale robberies 
of the people. This conclusion becomes irresistible when we 
find members of congress voting government aid to railroad 
companies in which lliey are stockholders and directors at the 
time the aid is yotod. 



/ 



OHAPTEB VIII. 



HAS OOBQBBBB THE FOWEB, UNDEB THB OONSTITnTIONy TO 0BBA.1X 
OB ENDOW FBIYATB OOBFOBATIONSt 

TO answer this question intelligently, we must examine the 
the powers granted to the United States, as well ae the 
rights, powers and relative duties of the state governments. 
The state governments are supreme in all matters affecting the 
public and the people, save in those which, bj the expressed 
provisions of the constitution, are delegated to, or conferred 
upon the general government. The powers thus delegated to 
the general government are all of a public character, such as the 
states individuallj could not control or execute, and such as 
were deemed essential to our national existence. All the priv- 
ilges, rights, and powers, not deemed essential to the success- 
ful administration of the national government, were reserved 
to the states and to the people. It follows that the general 
government is one of limited powers; that while it is supreme 
in all matters delegated to it by the constitution, and while in 
its several departments it can exercise all such implied powers 
as are necessary for the complete execution of those expressly 
delegated, neither the executive, legislative, nor judicial depart- 
ments can assume the exercise of powers not conferred upon 
them by the express provisions of the constitution; and that 
while the state governments can exercise all powers not express- 
ly prohibited in their constitutions, because of their general 
sovereign character, the general government is limited to such 
as are expressly granted. If these propositions are correct, 
then the general government has no authority for creating pri- 
vate corporations. 

We are aware that congress has assumed the negative of 
these propositions, and has granted charters to some of the 
meet gigantic corporations of the country, under which char- 

(88) 



M HQMOFOIIBS ABD THE FEOFUL 

ten they have organized and are doing bnainess in states whicb, 
according to oar interpretation of the constitution, as . above 
stated, Bhonid have the absolute control of such companies. 
We shall attempt to demonstrate that the acts of congress 
granting charters to ilailroadsi and othef private corporations 
are usurpations of power, in conflict with the provisions of the 
institution, destructive of the rights of the people and of 
republican government. 

What are the powers delegated to the general government 
by the constitution in questions of this character? Article L 
Section 8, contains, among others, the following, as some of 
the powers conferred upon congress: " To regulate commerce 
with foreign nations, and among the several states, and with 
the Indian tribes ; " " To establish post-oflSces and post-roads; " 
" To make all laws which shall be necessary and proper for 
carrying into execution the foregoing powers and all other pow- 
ers vested by this constitution in the government of the United 
States, or in any department or office thereof." The same sec^- 
tion gives congress power to provide for organizing the army, 
etc.; and, in time of war, extraordinary powers, controlled only 
by the necessities of the case, are vested in congress. If con- 
gress has power under the constitution to charter private cor- 
porations, it must be derived from, or contained in, the pro- 
visions above quoted. Article IX. of the constitution reads as 
follows: "The enumeration in the constitution of certain 
rights shall not be construed to deny or disparage others 
retained by the people." And Section 10 reads as follows: 
" The powers not delegated to the United States by the consti- 
tution, nor prohibited by it to the states, are reserved to the 
states respectively or to tiie people." And the framers of the 
constitution it would seem, for the purpose of making the line 
of demarcation between the powers of the states and the gene- 
ral government still more plain and definite, provided as fol- 
lows: Article IV., Section 2: "The citizens of each state 
shall be entitled to all privileges and immunities of citizens 
in the several states." 

We think that the above quotations from the constitution 
(and we have quoted all having any relation to the queatioa 



OOHGBSBBOKAL TOWSR OVER OORBOBATIOlim. Sft- 

we aie disoiiMiiig) prove concluBiyely that the powers ooafer- 
led npon congress by the constitution are limited; that while 
within the scope of the delegated powers its action is supreme, 
there is inherent in it no general power to legislate upon sub- 
jects not named in constitution, or not included by necessary 
implication. On the contrary, aU the powers not expressly 
given are reserved to the states or the people. 

Is the authority to charter private corporations necessarily 
included in the delegated power to regulate commerce among 
the several states, or to establish post roads? We think not. 
What do we understand by the word ^' commerce!" Webster 
defines it as foUows: ^^ 1st. In a general eense^ an interchange 
or mutual change of goods, wares, productions, or property of 
any kind between nations or individuals, either by barter, or 
by purchase and sale — trade, traffic. Commerce i% foreign^ or 
inland. Foreign commerce is the trade which one nation 
carries on with another; inland commerce, or inland trade, is 
the trade in the exchange of commodities between citizens of 
the same nation or state. 2d. Intercourse between individuals; 
inteixdiange of work, business, civilities, or amusements; mu- 
tual dealings in life." And again: "To traffic; to carry on 
trade." In the absence of any definition given to it in the 
constitution, we must accept the above general definition of 
its meaning as being the sense in which it is used in the 
constitution. 

Eeepecting trade with foreign nations or the Indian tribes, 
it can only relate to the interchange of commodities, or pur- 
chase or sale of articles of traffic. As incidental to this 
power, congress can prescribe rules for the regulation of navi- 
gation upon the high seas, including police regulations on 
board of vessels, because the oceans are the common or public 
highways of all nations, and each nation navigating the same 
is bound to protect not only its commerce, but its citizens or 
subjects. Nations hold commerce with nations across and 
upon, the iiigb seas, the citizens and subjects of each being 
protected by their own government. This commerce with 
foreign nations is not regulated by grants of private charters, 
bat by aQt9. of congress is open to all alik^i^iiaye where^foi: tho 



86 MONOPOUBB AND 1RB TWCfPiM* 

enoonragemeiit of certain branches of trade, certain bouiities 
or privileges have been granted to particular parties for a 
specified time. But all such grants have been to parties navi- 
gating the high seas. The control of navigable streams within 
the United States does not depend alone upon the powers 
given to congress to regulate the commerce of the country, 
but depends also upon the further power vesting in the general 
government exclusive maritime jurisdiction. If we concede 
that the power to regulate commerce among the several states 
gives congress the exclusive right to regulate the commerce 
carried on upon our rivers, it would not follow that the power 
to charter railway companies is conferred. Navigable streams 
are public high/ways^ open to the travel of alL No man, set of 
men, or corporations, can claim the exclusive right to navigate 
these rivers, nor could congress grant such exclusive right 
The daty of protecting the rights of the citizen, and of mitlring 
river transportation safe, and of protecting the rights of prop- 
erty, demand that the national, and not the state l^islature, 
should be supreme in this particular jurisdiction, and hence 
this branch of commerce is placed in the custody of the nation. 
But keeping in mind the definition of the word " commerce,'* 
let us see what is meant by the term as applied to dealings 
between the states. We insist that it has no reference to the 
construction of roads, railroads, canals, or any other ways 
upon which commerce might be carried, or over which articles 
of trade or traffic might pass, but that it refers only to the 
dealing of the people of one state with another; that while 
the people of each state are under the supreme control of 
their state authority, all the privileges enjoyed by the citizens 
ot sluj one of the states as to residence or traffic with the citi- 
zens of another state, are to be the same. No distinction can 
be made, and for the purpose of carrying out this provision of 
the constitution, and preventing the levy of tariflfe or taxes by 
one state upon the citizens of another state, and for the pur- 
pose of guaranteeing to all citizens of the United States im- 
munity from these unjust discriminations, the power to regu- 
late commerce among the states was delegated to congress. 
Nor does it follow that, for the purpose of regulating oommeiroe 



OOVOSBBBIOKAL POWSB OYXB 00BF0BATI01I8. 87 

imong the states, congress can grant exclusive privileges 
ind monopolies in any business not confined to one state. 
When the constitution was adopted, each state was independ- 
ent; each had all the powers and prerogatives of a nation; 
each was supreme within its geographical limits; each might 
prescribe its own rules in relation to immigrants, and to trade 
and traffic with other states; it might discriminate in favor of 
its own citizens; it might impose tariffs on foreign imports, 
and deal with its sister states as with foreign nations. To 
prevent this, and to secure to all citizens of the United States 
equal privileges and immunities in all parts of the United 
States, the provisions of the constitution we have quoted were 
adopted. While the independence of the States was recognized 
and preserved, the power to regulate commerce, among them, 
was delegated to congress; not the power to withdraw from 
the state its right to legislate upon the subject of commerce 
among its own citizens, or the right to protect its own citizens 
in their dealings with the citizens of other states; but simply 
providing that no discriminations should be made on account 
of residence, and establishing equal rights and privileges of all 
citizens of the United States in all tiie states, free from dis- 
criminations sought to be enforced under local or state stat- 
utes and regulations. Should any one state attempt to deny 
to the people of another state the privileges guaranteed by the 
constitution, then it would be the plain duty of congress to 
interfere and '^regulate com/merce^^ between these states. But 
while a general national law might constitutionally be enacted 
upon this subiect, it certainly cannot be claimed that upon the 
pretext of regulating commerce among the states, congress 
can charter railroad companies, or any other companies organ- 
ized for pecuniary profit. Nor can this power be claimed 
under the constitutional provision for the establishment of 
post offices and post roads. We admit that the grant of 
this power carries with it all such as are incidental; that by 
implication it includes within its terms the carrying and dis- 
tribution of the mails, and all other matter necessarily con- 
nected therewith; and that congress might build, own, and 
control poet roads, so far as the same might be found necessary 



88 MOXrOPOLQBS AND THE FK»UL 

for the trausportation of the mails over the territoiy belcmgiiig 
to the United States, and to provide for the use of public roads 
for government purposes. Public highways are free to alL 
Over these highways, whether on land or water, congreas 
can provide for the transportation of the mailfly troops, army 
stores, munitions of war, and other public property. These 
highways are at all times open to the public Bat while tliis 
is true, it does not follow that the government of the United 
States can take the absolute control of these public highway!, 
and, by act of congress, deny the states a control over thooe 
within their borders respectively. The location and establifih- 
ment of public roads within a state is a part of the local or 
police regulation, and while these roads are free to the passage 
of all, they are, by the provisions of the constitution, and the 
universally accepted custom of the country, recognized as being 
under the exclusive control of the states within which they aie 
situated. The fact that congress never has taken the control 
of the public roads of the country is a full recognition of the 
exclusive right of the states to control them. Then how can 
it be claimed that congress, under the constitution, possesses 
the power to charter railroad companies! Until within the 
last few years no attempt was made to grant charters to rail- 
road companies by the general government, nor indeed were 
charters granted for any purpose save in relation to the finan- 
cial departments, as in the case of United States banks, fiscal 
agencies, etc., which were chartered for the public benefit, and 
not as private institutions. We are not positive that the con* 
stitutionality of these railroad charters has been determined 
by the courts of the United States, but we are aware of the &ct 
that congress has deemed it necessary, in almost every instance 
where charters have been granted and aid voted, to declare, and 
place upon the record as a part of the charter, the reasons for 
granting it. The following are the reasons assigned in some 
of the charters, to wit: In the charter of the Union Pacific 
railroad company — " For the purpose of aiding in the construc- 
tion of said railroad and telegraph line, and to secure the safe 
and speedy transportation of the maUsy ^oopa^ mfunMana qf 
vWf a/nd public stores thereon!^ 



OQHOBBKONAL POWEB OYXB OOSFOBAIIOIVB. '89 

In ihe charter of the Northern Pacific railroad compatij: 
** For the pnrpoee of aiding in the confitmction of said railroad 
and telegraph line to the Pacific coast, and to secure tJte mfe 
and speedy tranaportiMan of the mailsy troops j rmmitiona of 
%oar, and public itores.^^ In all other cases the above quoted 
statement of cause is inserted in the charters, as though the 
right or authority to make these grants was so doubtful that 
it became necessary in every case to state the reason for the 
grant. If the present necessities of the government demand 
such special l^slation, then the same reasons existed irom the 
organization of our government; and if congress possesses the 
power under the constitution to make these grants, and to 
assume the absolute control of public or private roads through 
the states, then from the adoption of that constitution congress 
could have taken absolute control of all the public roads in 
all the states of the Union. Before railroads were constructed, 
all overland transportation of mails, troops, munitions of war, 
etc., was over the public highways — ^highways that were and 
still are under the exclusive control of the states in which they 
lie. Over these public roads and such private ways as may 
be selected, government has a right to transport the mails, 
troops, and public property, and no state has the right to pro- 
hibit or restrict this right. Still, no power is given by the con- 
stitution, nor is there any implied, under which congress can, 
under the plea of rendering more safe and speedy the trans- 
portation of mails, troops, etc., grant exclusive charters and 
privileges to private corporations. In the nature of things, as 
our government is organized, the right to charter and control 
all corporations organized for pecuniary profit remains with 
the states. This power has never been delegated to the general 
government, nor prohibited to ttie states, or people. There can 
be no doubt upon this point, when we remember that the gen- 
eral government is limited to the delegated powers; and that 
it is supreme only in those matters which are delegated to and 
vested in it by the constitution. This position is fully sus- 
tained by the adjudication of the supreme court of the United 
States. In Marshall on the Federal Constitution, page 164, 
we find the following: '^This government is acknowledged by 



90 HOUOPOUES AND TITE PBOPUL 

ftU to be one of ennmerated powers. The principle tliat it < 
exercise only the powers granted to it, would seem too apfMff- 
ent to have required to be enforced by all those argnmenti 
which its enlightened friends while it was depending before the 
people found it necessary to urge. That principle is now ani- 
versally admitted." Again, on page 301, the author mjb: 
^In our complex system presenting the rare and diffieait 
scheme of one general government whose action ext^ids over 
the whole, but which possesses only certain enumerated powers 
and of numerous state governments, which retain and exercise 
all powers not delegated to the union, contests respecting 
power must arise. Were it otherwise, the measures taken by 
the respective governments to execute their acknowledged 
powers would often be of the same description, and might 
sometimes interfere. This, however, does not prove that one 
is exercising, or has the right to exercise, the power of the 
other." 

As to the power of congress to create corporations, an arga- 
ment has been drawn in its favor from the provision of the 
constitution which declares that congress shall have the power 
of making '' all laws which shall be necessary and proper for 
carrying into execution the foregoing powers, and all other 
pc»wer6 vested by this constitution in the government of the 
United States, or in any department thereof." The question 
before the court arose out of the attempt of the state of Mary- 
land to tax the United States bank, a corporation chartered by 
congress. In this case the power was upheld on the ground 
tliat the bank was necessary in the administration of the 
finances of the government, that being one of the matters vest- 
ed in or delegated to the general government, the power to 
charter the bank was incidental to the granted power. But 
on the question of the power of congress to create corporations, 
Mr. Marshall says, page 167: "The creation of a corporation, 
it is said, appertains to sovereignty. This is admitted. But 
to what portion of sovereignty does it appertjiin? Does it 
belong to one more than another? In America the powers of 
sovereignty are divided between the government of the Union, 
and those of the states. They are each sovereign with respect 



OOSrOBaBBIONAL POWER 'oyer a)BFOSATION8. 91 

to the objeets oommitted to it, and neither Bovereign with 
respeet to the objects committed to the other. We cannot 
comprehend a train of reasoning which would maintain that 
the extent of power granted by the people is to be ascertained, 
not by the nature and terms of the grant, but by its date. 
Some state constitutions were formed before, some since that 
of the United States. We cannot believe that their relation to 
each other is in any degree dependent upon this circumstance. 
Their respectiye powers must, we think, be precisely the same 
MB if they had been formed at the same time. Had they been 
formed at the same time, and had the people conferred on the 
general goyemment the power contained in the constitution 
and on Uxe states the whole residium of power, would it have 
been asserted that the government of the union was not sover- 
eign with respect to those objects which were entrusted to it, 
in relation to which its laws were declared to be supreme? If 
this could have been asserted, we cannot well comprehend the 
prooess of reasoning which maintains that a power appertain- 
ing to sovereignty cannot be connected with that vast portion 
of it which is granted to the general government, so far as it 
is calculated to subserve the legitimate objects of that govern- 
ment. The power of creating the corporation, though apper- 
taining to sovereignty, is not like the power of making war, or 
levying taxes, or of regulating commerce, a great substantive 
and independent power which cannot be implied as incidental 
to other powers, or used as a means of executing them. It is 
never the end for which other powers are exercised, but the 
means by which these objects are accomplished. No contribu- 
tions are made to charity for the sake of an incorporation, but 
a corporation is created to administer the charity. No semi- 
nary of learning is instituted in, order to be incorporated, but 
the corporate character is conferred to subserve the purposes 
of education. No city was ever built with the sole object of 
being incorporated, but it is incorporated as the best means of 
being well governed. The power of creating a corporation is 
never used for its own sake, but for the purpose of effecting 
something else. No sufficient reason is therefore perceived 



92 HONOFOUIEB AND THR FBOFLE. 

why it may not pass as incidental to those powers which 
expressly given if it be the direct mode of executing them.'' 

Taking the above definition of corporations, and their 
in the administration of the government, we can ha.ve no diffi- 
colty in distingnisbing the cases in which congress can gnmt 
charters to any company or association. It is only when some 
of the delegated powers reqnire the aid of corporate aets in 
their administration, that the right exists in congress to gmit 
charters, as incidental to the grants. The grants of charten 
to railroad companies cannot be claimed as incidental to moj 
express delegation of power to the general government. If 
railroads are private property, they cannot be chartered or eon- 
trolled by congress. If they are to be taken and treated as 
public highways, then they are as exclusively under and subject 
to the control of the respective state governments, as common 
highways. The state legislatures have exclusive control of 
them in eitlier case. If they are treated as private corporations, 
then under the rights reserved to the states, as well as by long 
usage, their exclusive control is retained by the states. If 
they are public roads, the same local or state laws apply to 
them as to all other public roads. Admit that congress has 
the right to grant charters for railroads, then it follows that it 
can coiitn)l them. Admit that they are public roads, and that 
they are to l)e taken and treated as common highways, and con- 
gress at once assumes the local and police regulations of all 
the public roads in all of the United States. 

To this doctrine we cannot subscribe, but insist that the 
exclusive power to charter and control railroad corporations 
remains with the people to be exercised by and under the exclu- 
sive control of the state govern men t/s. Nor can congress, 
rightfully, under the constitution, charter railroad corporations 
in the territories. The power vested in congress " to dispose 
of and make all needful rules respecting the territory or other 
property belonging to the United States," does not authorize 
the creation of private monopolies. When territorial govern- 
ments are formed, they are clothed with many of the attributes 
of sovereignty. These governments are at liberty to l^islate 



OONGRBaaiONAL POWKR OVER 00RFORATION8. 93 

snd to provide for the well-being of the people, and subject to 
the provisioDB of their " organic law," have the complete control 
of local and police regulations. They can construct highways, 
eroct public bnildings, impose taxes, grant charters, including 
charters to railroad companies. That territorial governments 
GUI charter railroad companies, and that general government has 
■o acknowledged is proven by the acts of congress in donating 
landfl and bonds to companies chartered by territorial l^sla- 
tion. Thia was done in the case of the Leavenworth, Pawnee 
A Western railroad company, chartered by the territorial Icg- 
islatnre of Kansas; and other instances are common. The 
power to grant charters cannot vest in the states, and territorial 
governments, and at the same time exist in the general gov- 
ernment, for the. reason that the supreme power must exist 
in one or the other. If this were not so, one government 
eonld destroy what the other had created. The privileges 
acquired by a corporation under one could be entirely annulled 
by the other. Private rights would be subject to the adjudica- 
tion of two separate and distinct tribunals, created and sus- 
tained by distinct governments, the one claiming to be supreme, 
because the right to exercise the power had been granted to it, 
and the other denying such grant, and because of this denial 
claiming the power as still remaining with the state govern- 
ment This course would be destructive of the rights of the 
people, as well as of our system of government. Concede to 
congress the right to charter railroad companies, and there is 
no limit to the monopolies that can be forced upon the people 
of the whole country. Land companies, loan, and interest 
companies, manufacturing companies, and in short all con- 
ceivable projects of speculation can obtain charters from ccm- 
gress, and our government becomes entirely personal in char- 
acter, without restraint or cx)nfttitutional limit. The assump- 
tion by congress of the power to create private corporations is 
a fatal stab at our system of government, destructive of state 
rights, and a wanton violation of the constitution. 



CHAPTER IX. 

* STATE BIGHTS AT THE BAB OF A COBBUPT OOVQ] 

NONE of the subjects of legislation have tended to destroj 
constitutional safeguards and debase public monds so 
much as congressional legislation, with its grants of land and 
bonds, and other special benefits in favor of railroad corpora- 
tions. This species of legislation has well nigh destroyed 
republican institutions. While our government is republican 
in name it is in fact controlled by an oligarchy. The whole 
government has become a prey to the class of corporations 
above named, and is administered in their interest Their 
influence controls the legislative department, the courts of the 
country and its finances. This is a sweeping assertion, but 
who will deny it? Further, the very men who by their 
votes in congress, have created these monopolies, have them- 
selves, in many instances, received pecuniary consideration for 
their votes, either in corporate stock or direct payment. This 
last assertion is now, (January 9, 1873,) being supported by 
results arrived at by committees appointed to investigate 
charges of corruption made against members of both branches 
of congress. 

Having assumed the right to grant charters and aid to these 
corporations in violation of the constitution, it was but one 
step further in the same direction for congress to enact other 
unconstitutional laws, regulating and combining railroads 
receiving their charters from state legislatures, laws which 
enable these roads to so combine their operations as to control 
the entire interests of the country. These acts are numerous 
in the published laws of congress. We will refer to some of 
them, and direct the reader to the following, of a general 
nature: On the 15th of June, 1866, congress passed the follow- 
ing unconstitutional act in the interest and for the benefit of 

(94) 



8TATK RIOHT8 AT THE BAB OF A OORBUFT OqNORESS. 95 

railroad corporations: See Second Brightley's Digest, page 528, 
"That every railroad company in the United States, whose 
road is operated by steam, its successors and assigns, be and 
ijB hereby authorized to carry upon and over its road, boats, 
bridges, and ferries, all passengers, troops, government sup- 
plies, mails, freight, and property, on their way from one state 
to another state, and to receive compensation therefor, and to 
connect with roads of other states so as to form continuous 
lines for the transportation of the same to the place of desti- 
nation. Provided that this act shall not affect any stipula- 
tioDB between the government of the United States and any 
railroad company for transportation and fares without com- 
pensation, nor impair or change the conditions imposed by 
the terms of the, acts granting lands to any such company to 
aid in the construction of its road, nor shall it be construed to 
aathorize anv railroad company to build any new road, or 
connection with any other road without authority from the 
state in which said railroad, or connection, may be proposed." 
Commenting upon this extraordinary statute, the editor says: 
^ In the preamble to this extraordinary assumption of power, 
on the part of the federal congress, they prefer to base their 
authority for it on the power to regulate commerce among the 
several states, to establish post-roads, and to raise and support 
armies. But it has been decided that the constitutional power 
to establish post-roads is confined to such as are regularly laid 
out under state authority; the government of the United States 
cannot construct a post-road within a state of the Union 
without its consent. The post-roads of the United States are 
the property of the states through which they pass. The 
United States have the mere right of transit over them for the 
purpose of carrying the mails; the government could not have 
an injunction to prevent the destniction of a mail-road." 
Citing the case of the Cleveland, Painesville & Ashtabula 
Railroad Company vs. The Franklin Canal Company, in the 
circuit court of the United States, the editor adds: "Congress 
certainly can confer no rights on a railroad company incorpor- 
ated by a state government which are withheld from it by the 
charter of its creator." 



96 MONOPOLIES AND THE PEOPLE. 

The above quoted act asenmes that ooDgress has foil power 
to regalate the connection of railroads in the different states^ 
as well as the carrying trade upon the same. It strips the 
several state governments of all power to interfere, and in case 
of any controversy, takes from the state courts the power to 
determine the rights of the respective parties; the act of con- 
gress could be pleaded, and, as a necessary consequence, the 
United States courts would have exclusive jurisdiction. It 
cannot be claimed that this act can be supported under any 
express delegation of power to the general government, nor 
can it be supported as being incidental to any express grant. 
It is an usurpation not warranted or sustained by any part of 
the constitution. This one section quoted destroys the right 
of any state of the Union, or of two or more of them, to l^is- 
late upon the subject of nniting or connecting railroads meet- 
ing on the lines dividing them, and also takes from the states 
the right to regulate the carrj'^ing trade within their own 
respective borders. Congress had no more authority under 
the constitution to enact this law than to provide by statute 
for the construction of public highways when they meet upon 
the line dividing states, or to provide for the passage of teams 
from one state to another, and the transportation of freights 
over the common highways within or across a state. Tli# 
whole power under the constitution is reserved to the states. 
Prior to the creation of these great railroad monopolies by 
congress, an attempt at such legislation would have been 
deemed unconstitutional, but as soon as the whole affairs of 
government passed into the hands of the few, and when the 
protection of their interests demanded it, the act was passed, 
and has remained upon the statute book as one of the laws of 
the land. This act is about the only one that openly and 
broadly covers the whole ground, and assumes to regulate the 
internal affairs of the- states, but there are numerous acts 
passed in relation to land grants and the companies chartered 
by congress which have the same effect. In some cases the 
absolute control of roads constructed under charters obtained 
from state legislatures, or under state laws, has been taken 
from the states by acts of congress, and placed under the 



STATE KIGHTB AT THE BAB OF A COBBUFT 0ONOBE8B 97 

jmifldiction of the general govemment. In most instances where 
this has been done, members of congress, or their near rela- 
tives, were large owners of stock in the companies to be bene- 
£ted by the act To speak more plainly, the acts granting 
special privileges to particular companies, and placing them 
under the jurisdiction of the federal government, were passed 
for the benefit of congressmen and others in high oflSdal posi- 
tion. Let us examine some of these acts. Among the stock- 
holders and directors of the Union Pacific and its branches 
there are found at least eight persons who were members of 
congress at the date of the act of congress creating the cor- 
poration, and also at the date of the material amendments to 
the charter. Some of these congressmen are still stockholders 
and directors, and were directors when congress released these 
companies from payment of interest on the bonds they had 
received from the govemment. Another land grant company 
having congressmen among its stockholders and directors, is 
the Leavenworth, Lawrence & Galveston; also, the Iowa FaUs 
& Sioux City; also, the Cedar Rapids & Missouri Kiver; also, 
the Burlington & Missouri River; also, the Atlantic & Pacific; 
also, the New Orleans, Mobile & Texas; also, the Northern 
Pacific; also, Sioux City & Pacific; also, the Fremont, Elk- 
R>m & Missouri Valley. The number might be extended, 
but enough is given to sustain our charge. Most of the 
above named companies were organized under state laws, or 
received their charters from state or territorial legislatures. 
For the purpose of consummating certain speculative ends, 
congress has treated with contempt state laws and state 
antbority. Where charters have been granted under state 
authority, and the companies were rightfully under the control 
of the states within which their roads were located, acts like 
the following have been passed by congress: "That the Leaven- 
worth, Pawnee & Western railroad company of Kansas, are 
hereby authorized to construct a railroad and telegraph line 
from the Missouri river, at the mouth of the Kansas river, on 
the south side thereof, so as to connect with the Pacific rail- 
road of Missouri;" and then follow the details for constructing 
and operating the road, and placing it under the control of the 



V5 MONOFOLIB9 AND THE PBOPLK. 

general government In the case of the Central Pacific com- 
pany, chartered by the state of California, congress passed the 
following act: 

"The Central Pacific railroad company of California, a cor- 
poration existing under the laws of the state of California, are 
hereby authorized to construct a railroad and telegraph line 
from the Pacific coast, at or near San Francisco, or the navi- 
gable waters of the Sacramento river, to the eastern boundary 
of California." 

Substantially the same provision is found for most of the 
corporations above named, and in all these cases the authority 
to construct the road is followed by a provision for aid by the 
general government. 

It might be pertinent to inquire why it became necessary for 
congress to assume the control of railroads already chartered 
under state authority. It cannot be claimed that the states 
acted without authority in granting the charter; nor can the 
authority of the general government to take from the states 
the control of railroads within their border, be supported by 
any grant of power contained in the constitution. On the 
contrary, the power is reserved to the states, and its exercise 
is denied to the general government. It cannot be urged that 
the interests of the people are subserved by this assumption 
of power; on the contrary, these acts of congress take from 
tlie public its rights reserved by the constitution. But one 
answer (tan be given — th^e acU were passed for the jfTomotian 
of selfish aiid corrupt ends. In support of this, we need only 
state the fact that in almost every instance where congress has 
attempted to re-charter companies organized under state au- 
thority, and granted them aid, members of congress who were 
members at the date of the passage of the acts were stock- 
holders, and not unfrequently directors. Some congressmen 
who have been members for the last ten or twelve years, are 
stockholders in several of the companies, and at least one 
member of congress of twelve years standing is now a director 
in at least three companies tl^at received grants of land, one of 
them getting large amounts of subsidy bonds, for all of which 
he voted, and for which, as often as occasion served, he has 



OTATE BIGHTS AT THS BAB OF A OOBBUFT OOKOBB88. 99 

used his vote and inflnence m procnring additional privileges. 
We do not claim that every member of congress is interested 
in railroads; but we do assert that there are many senators 
and representatives who are personally interested, and that the 
proportion is so great that whenever it is desirable to have 
legislation it can be obtained without difficulty. To prove 
that the chartering and endowing of railroad companies is one 
of the principal occupations of the national legislature, we 
have only to look through the acts of congress the last two or 
three sessions. At the first session of the forty-second con- 
gr^s, fourteen railroad bills were passed, some of them con- 
ferring grants to companies yet in embryo, having no being 
save upon paper, but presenting " great expectations " to our 
congressmen, who combine the business of granting charters 
and building railroads, and who find no indelicacy in becoming 
stockholders and directors in the corporations to which they, 
as congressmen, have voted lands and money. Some of 
these roads, under the acts of congress, present great induce- 
ments for investments, and in due time will receive proper 
attention. The effect of this species of legislation has been 
most baneful. The national congress, once the most pure and 
patriotic body in the world, has become the headquarters of 
all the unscrupulous men of the nation. It is under the con- 
trol of dishonest and reckless men. Elections to seats in that 
body have become of such value that to secure them men do 
not hesitate to pay more than the salary for the ""entire term. 
Nor do candidates always pay their own money. It is often 
famished by rings and interests which require special legisla- 
tion. It is now well understood that senators and representa- 
tives are in the market like other commodities. The purchase 
is made either in large donations of $10,000, $20,000, $30,000, 
or more from single corporations, or by shares, stocks, or bonds 
in companies chartered by congress, and afterwards fostered 
and protected by congressmen. So common has this practice 
become that it is not now considered disreputable. What in 
former years would have been deemed bribery and corruption 
are now nothing but fair business transactions. We recall a 
^ which illustrates the purity of former legislation compared 



100 MONOPOLDBS Am) THB PBOFIB. 

with what we see in our own day. Some thirty yean 
ago, certain parties desired a charter for a denominational 
college. A Bev. Mr. Strong was appointed to visit the capital 
and interest the legislature in behalf of the charter. He was 
introduced to a Mr. Gushing, to whom he presented his case, 
and whom he sought to interest in favor of the grant. The 
grant of the charter was likely to meet with opposition, and 
to remove certain objections, Mr. Strong was anxious to have 
Mr. Gushing examine into the matter fully, and as an indnoe- 
ment for making such an examination he was told that the 
friends of the measure would compensate him liberally for the- 
time he might spend in such examination. This Mr. Gushing 
intwpreted as an offer to bribe a member of a legislative body, 
and he felt bound to resist it. Accordingly he laid the matter 
before the honse. That body, by unanimous vote, ordered the 
sergeant-at-arms to arrest Mr. Strong and bring him to the 
bar of the house. After an investigation into the truth of the 
charge, Mr. Strong was found guilty, and publicly reprimanded 
by the speaker. This happened before legislators had learned 
to speculate upon their official position. It was in simple 
times, when those elected to office supposed their first duty was 
to serve their country, and when it was an irrecoverable disgrace 
to receive a bribe. It was at a time when our law-makers had' 
too much self-respect to purchase their election with tens of 
thousands of dollars, and then reimburse themselves by taking 
stock in, and dividends from, giant corporations chartered and 
created by themselves. How is it now ? Let the facts answer. 
Class or personal legislation, for special combinations, or in 
certain interests, is the rule, and legislation for the benefit ot 
the whole people is the exception to that rule. Gongressmen, 
to secure an election, expend large sums of money, and when 
elected their first care is to get even. To accomplish their pur- 
pose, they resort to unconstitutional l^islation such as granting 
exclusive privileges or jobs to individuals, for which indirect 
pecuniary consideration is received. But this alone would not 
suffice to reimburse them for their great outlay. The greatest 
sounie of profit to congressmen has been — and, unless it is 
cheoksd^ ^i eontinne to be— found in raUroad legislatknt 



CHAPTER X. 

▲V TTHBBnUED AOOOUHT — A GTJILTT DIBE0T0B7. 

WE now invite the attention of the reader to the acoonnt 
as it now stands with the subsidy bonds voted by 
oongressmen to companies in which many who voted were 
stockholders and directors. 

As the law stood prior to April, 1871, all railroad companies 
that had received government lands were required to pay the 
interest once in six months as it accrued. This interest had 
not been paid, and the secretary of the treasury withheld, to 
apply on the accrued interest, the amount earned by the differ- 
€lDt companies by the transportation of the mails, troops, etc., 
for government. Congress, composed in part of stockholders 
and directors in these same companies, passed a law ordering 
the secretary to pay in money to the different companies one- 
half of the amount thus earned, and left it optional with the 
companies to pay, or not to pay the interest on their bonds. 
I?hi8 they have not done, and the interest actcount of these 
companies with the government stands about as follows : 

Central Pacific, paid | 527,025 Balance due... |io,841, 351 

Kansaa Pacific, paid 978,905 " " .., 995,448 

Union Pacific, paid 2,181,989 " ** . . . 4,779,768 

Central Branch,U. P., paid.. 15,889 " "... 477,969 

Western Pacific, " paid.. 9,850 " "... 858,829 

SSouxCityA; Pacific, paid.. 826 " "... 888,780 

Making the total amount of payments the sum of $3,708,935, 
and the amount that these companies owe pfovemnient, as the 
accrued interest on subsidy bonds, $12,861,^40. Tin's is the 
amount due in July, 1872. Add the interest accruing since 
that date and these companies owe the government not less 
than $16,000,000 interest on their bonds. This amount, as 
well as future interest, and the principal of the bonds was at 
one time secured to the government; but when congressmen 

(101) 



102 MONOFOIIEB AHD THB FBOFLB. 

and their friends get a controlling interest in the oompaniea, 
they procured the passage of an act, supported bj their own 
votes, which destroyed the security held by the government, 
and relieved the companies of the payment of this large amount 
of interest, thereby compelling the people to pay it, while the 
stockholders, including some of the same congreaamen who 
had voted in favor of the act, received dividends on their stock 
and on their Credit MobiUer stock to the amount of two and 
three hundred per cent. ; thus, by the abuse of the power 
vested in themselves as members of congress, compelling the 
people to pay the interest the companies should have paid, and 
pocketing in the shape of dividends the money so dishonestly 
obtained. K we needed any further proof to establish the &ct 
that these Pacific railroads were in fact congressional jobs, thai 
members of congress were looking to their own interests 
rather than to the interests of the people, we need but glance 
at the interest account of the Sioux City & Pacific company. 
The excuse pleaded of the " necessities of ^vemment," wfll 
not avail in this instance. While the interest account of this 
company is about $400,000, the account for the transportation 
of troops, mails, etc., over its road, amounts to the sum of 
$1,642, one half of which has been applied on the interest 
account of the company, and the other half, under the act of 
congress, has been paid by the secretary of the treasury to the 
company. The conclusion is irresistible, that the personal 
interest of congressmen, rather than the wants of the public, 
has controlled their action. 

Connect with the incorporation of railroad companies, and 
special legislation in their favor, the legislation in favor of 
" Indian rings," " whisky rings," '* patent right combinations," 
and the numerous other kinds of special legislation, with the 
advantages presented to legislators to make personal gain from 
all these sources, and we can well understand why men are 
willing to spend such large sums to secure an election to the 
United States senate, or house of representatives. The baneful 
efiects of the modem code of political morality are not seen in 
the legislative department of the government only. The same 
disregard of the rights of the people, and a determination to 



AH UKBETTLBD AOOOUlfr — A GUILTY DIBflCTOBY. 108 

protect and aid combinations in their efforts toward self- 
aggrandizementy made at a sacrifice of those principles which 
are supposed to govern all persons holding places of trost, 
honor, or confidence, seem to influence to a great degree those 
holding high position in other dejmrtments of the government 
The acts of congress chartering the Pacific railroad companies 
make it the duty of the president of the United States to 
appoint five government directors for these roads. Under the 
statutes these directors cannot own stock in the companies; 
nor have in them any personal interest whatever. They are 
supposed to be free from any bias for or against the companies; 
but they are appointed to represent the government, and to 
guard against and report to the secretary of the interior all 
abuses on the part of the companies, and at such times as they 
are required to so report, to also make such suggestions as in 
their opinion shall best subserve the interest of the public. It is 
made their duty to personally inspect the roads, during their 
building and after their completion. At least two of these 
government directtors must have a place on all important com- 
mittees appointed by the companies for the management and 
prosecution of their business. Any dishonesty on the part of 
the companies in letting contracts for the construction of their 
roads, or any misapplication of the grants made by congress, 
must have been known to these five government directors, or 
some of them, if they had properly discharged the duties 
imposed upon them by law. The formation of an inside ring, 
under the title of *' The Credit Mobilier of America," com- 
posed entirely of the directors and stockholders of the Union 
Pacific company, the letting of the contract for the construc- 
tion of the road to one of the directors of the railroad com- 
pany, who was also a director in the Credit Mobilier (and a 
member of congress), at more than double its actual cost, the 
transfer of this contract to certain trustees who were directors 
in both companies, in a manner stated in a preceding chapter 
in this work, and the declaration of large dividends on the 
stock of the companies at a time when the work on the road 
was barely begun, and before any dividends could possibly have 
been earned,— all these facts must have been known to the 



96 MONOPOLIES AND THE PEOPLE. 

The above quoted act aseumes that ooDgress has full power 
to regulate the counection of railroads in the different stAtes, 
as well as the carrying trade upon the same. It strips the 
several state governments of all power to interfere, and in case 
of any controversy, takes fVom the state courts the power to 
determine the rights of the respective parties; the act of con- 
gress could be pleaded, and, as a necessary consequence, the 
United States courts would have exclusive jurisdictioiL It 
cannot be claimed that this act can be supported under any 
express delegation of power to the general government, nor 
can it be supported as being incidental to any express grant. 
It is an usurpation not warranted or sustained by any part of 
the constitution. This one section quoted destroys the right 
of any state of the Union, or of two or more of them, to l^is- 
late upon the subject of nniting or connecting railroads meet- 
ing on the lines dividing them, and also takes from the states 
the right to regulate the carrjang trade within their own 
respective borders. Congress had no more authority under 
the constitution to enact this law than to provide by statute 
for the construction of public highways when they meet upon 
the line dividing states, or to provide for the passage of teams 
from one state to another, and the transportation of freights 
over the common highways within or across a state. Th# 
whole power under the constitution is reserved to the states. 
Prior to the creation of these great railroad monopolies by 
congress, an attempt at such legislation would have been 
deemed unconstitutional, but as soon as the whole affairs of 
government passed into the hands of the few, and when the 
protection of their interests demanded it, the act was passed, 
and lias remained upon the statute book as one of the laws of 
the land. This act is about the only one that openly and 
broadly covers the whole ground, and assumes to regulate the 
internal affairs of the- states, but there are numerous acts 
passed in relation to land grants and the companies chartered 
by congress which have the same effect. In some cases the 
absolute control of roads constructed under charters obtained 
from state legislatures, or under state laws, has been taken 
from the states by acts of congress, and placed under the 



8TATE KIGHTB AT THE BAB OF A COBBUFT 0ONOBE8B 97 

jurifldiction of the general government. In most instances where 
this has been done, members of congress, or their near rela- 
tives, were large owners of stock in the companies to be bene- 
fited by the act. To speak more plainly, the acts granting 
special privileges to particular companies, and placing them 
nnder the jurisdiction of the federal government, were passed 
for the benefit of congressmen and others in high official posi- 
tion. Let us examine some of these acts. Among the stock- 
holders and directors of the Union Pacific and its branches 
there are found at least eight persons who were members of 
congress at the date of the act of congress creating the cor- 
poration, and also at the date of the material amendments to 
the charter. Some of these congressmen are still stockholders 
and directors, and were directors when congress released tliese 
companies from payment of interest on the bonds they had 
received from the government. Another land grant company 
having congressmen among its stockholders and directors, is 
the Leavenworth, Lawrence & Galveston; also, the Iowa Falls 
& Sioux City; also, the Cedar Rapids & Missouri River; also, 
the Burlington & Missouri River; also, the Atlantic & Pacific; 
also, the New Orleans, Mobile & Texas ; also, the Northern 
Pacific; also, Sioux City & Pacific; also, the Fremont, Elk- 
mm & Missouri Valley. The number might be extended, 
but enough is given to sustain our charge. Most of the 
above named companies were organized under state laws, or 
received their charters from state or territorial legislatures. 
For the purpose of consummating certain speculative ends, 
congress has treated with contempt state laws and state 
authority. Where charters have been granted under state 
authority, and the companies were rightfully under the control 
of the states within which their roads were located, acts like 
the following have been passed by congress: "That the Leaven- 
worth, Pawnee & Western railroad company of Kansas, are 
hereby authorized to construct a railroad and telegraph line 
from the Missouri river, at the mouth of the Kansas river, on 
the south side thereof, so as to connect with the Pacific rail- 
road of Missouri;" and then follow the details for constructing 
and operating the road, and placing it under the control of the 



106 MONOPOUEB AND THB FBOFLB. 

the last few years, been made through the influence and in the 
interest of these monopolies. These corporations are also rep- 
resented in the cabinet. It is well understood that the removal 
of Attorney-General Ackerman, and the appointment of his 
successor, was done by these corporate influences. The &ci 
that the secretary of the interior, to whom reports should have 
been regularly made of the progress and condition of the 
Pacific railroad, was silent, while private fortunes were being 
fraudulently taken from the public treasury, proves that he also 
was under the same influence. It can be accepted as an estab- 
lished fact, that all the departments of the government are to a 
great extent controlled by corporations and combinations of 
speculators whose interests are adverse to those of the people, and 
the result is, that statutes are enacted, executive officers 
appointed, and decisions of court rendered in the favor of these 
powerful classes, while the rights guaranteed to the iKX>ple by 
the constitution are disregarded. 

The influence of corporations is also powerful in the admin- 
istration of state governments. While no such gigantic mon- 
opolies as the Pacific railroad have been organized in any state 
yet, either by special charters granted by state legislatures, or 
under general incorporation laws, railroad corporations in large 
numbers have been organized, and by combining their infiuence 
have obtained control of most of the state governments; they 
have been granted special and exclusive privileges, and by the 
use of money and patronage have been able to control state con- 
ventions, state legislatures and state courts. As a logical 
result, the people are taxed, while railroad companies are 
practically free from taxation; subsidies to corporations are 
authorized and declared to be constitutional, and the people 
are obliged to submit to rates of charges for transportation of 
freight that amount to a confiscation of the farm products of 
the country. We need not enter into a history of state grants 
to railroad companies, for it is familiar to all; the same corrupt 
practices incident to national, attend state, legislation. In 
many instances, corporations have organized under state 
statutes, or obtained special charters from state legislatures, 
located their roads, procured local aid, and then obtained fix>m 



AH ujwirrru p aooount — a guiltt dirbotobt. 107 

oongress land grants for their roads, and have thns become 
powerful in the states where they are located, while other com- 
panies have built their roads exclusively with the means afford- 
ed by local aid voted under state laws, and loans of money or 
sale of bonds; but in every instance so planning and contriv- 
ing that the entire road shall pass into the exclusive control of 
a select few, leaving to those who furnished the local aid no 
rights or privileges in connection with the company or the road, 
save that of i>aying extortionate freights and burdensome taxes. 



CHAPTER XI. 

IHB SQLB FUBPOSBB OF TAXATIOV. 

TAXES can only be levied, and collected for public pur- 
poses; but all the property of the country can be taxed to 
its entire value, when the public good requires it The exi- 
gency demanding high rates of taxation is left to the determi- 
tior of the legislatures of the states, and of the general govern- 
ment No taxes can be legally levied or collected save for the 
support of the government, state and national, and subject to 
the restrictions incorporated in the constitution. All other 
taxes imposed upon the people are unconstitutional, illegal, 
and oppressive, and should be declared absolutely void. Direct 
taxation, for the support of the general government, has never 
been practiced in time of peace. The usual method for raising 
a suflBcient revenue for its support has been by duties, or tariff 
imposed by acts of congress upon imports. Tliis has always 
been deemed the best method for raising the revenue necessary 
for the support of the government. Tlie powers and duties of 
the general government are limited and restricted by the con- 
stitution of the United States; and as its legislative, executive, 
and judicial powers are thus limited, it follows that its power 
to impose taxes upon the people is limited in the same manner, 
and that it can tax for no purpose save for defraying the ex- 
pense of its different departments in the exercise of the powers 
delegated by the federal constitution. This conceded, all that 
can be claimed by those who administer the affairs of the 
nation, unless they transcend the constitutional limit, is con- 
ceded. The power to appropriate the lands or money of the 
public to private parties or corporations not being found in 
the constitution, nor implied in any of the granted powers, 
all such appropriations are usurpations; they are donations of 
the people's money and property to private corporations and 

(108} 



BOLE PUBP08E6 OF TAXATION. IW 

iodiyidTxadfliii violation of the constitutional restrictionB; and no 
anthority ie vested in congress to tax the people either directly 
or indirectly, for the purpose of making return of the money 
and property thus wrongfully taken from them. A private 
corporation is not a public necessity; its franchises are private 
property and even if the United States owned the whole of its 
stock, and took the entire control of its business, it could not* 
become a public corporation for the reason that congress does 
not ])068e8s the power, xmder the constitution, to create private 
corporations. The fact that the United States owned the stock 
and controlled the corporation would not impart to it any of 
the attributes of sovereignty, but in so far as the general gov- 
emment was interested in the corporation, it would be treated 
as any other private party, and would be amenable to the same 
law and subject to the same jurisdiction as private parties or 
mdividuals. If the action of the general government can con- 
fer none of the attributes of sovereignty upon a private cor- 
poration — if it has no constitutional authority to donate lands 
or money to railroad companies — how can it lawfully collect 
taxes from the people, either by direct levies, or in duties upon 
articles of commerce, for the purpose of reimbursing the gov- 
ernment for the lands donated to corporations, or to pay either 
the principal or interest on the bonds given to these corpora- 
tions? As well might congress levy a direct tax upon the 
property of the people for the purpose of donating to a private 
party sufficient means to build a residence; there is not found 
in the constitution any warrant for either of such levies. Both 
alike are unwarranted usurpations of power, not to be justified 
under any grant of power from the people to the federal gov- 
ernment. To admit that the congress of the United States 
possesses the power to tax the people for any purpose save for 
the support of the general government, is to admit that the 
constitution is elastic, subject to any congressional construction, 
and liable to be used as an instrument for promoting personal 
and private ends. Congress had no power to vote subsidy 
bonds to railroad corporations as we have already shown ; nor 
OTuld it release these corporations from the payment of these 
bond% and the interest as it accrues, and coUeot the amomt 



110 MONOFOIIBS Ain) THB FBOFCJL 

from the people in duties on imports or in any other kind of tucet. 
No snch power was ever delegated to the general goyemment 
by the people. This power cannot be found in any part of the 
constitution. While this is true, the people are now taxed 
annually to the amount of many millions of dollars to pay the 
interest on the bonds issued to the Pacific railroads. Taxes 
are also collected to the amount of $18,000,000 or $20,000,000 
to pay the interest on the banking capital of the coxmtry, the 
BtocH of a gigantic corporation, chartered by congress, but in 
the hands and under the control of private parties and compa- 
nies. While the general government, under the constitution, 
has the control of the money of the country, and its coinage, 
value, etc., and can provide such means as shall be deemed 
best for the administration of the national or public finances, 
it has no power to enter into private banking; and because it 
has not this power, it cannot create private banking institu- 
tions and tax the people for their sapport. Any tax levied upon 
the citizen by the general government for any purpose whatso- 
ever, save for the necessary expenses in the administration of 
the same, in all of its departments, in accordance with the let- 
ter and spirit of the constitation, is without authority, and vio- 
lates the fundamental law. The levy of taxes in aid of private 
corporations subserves none of the purposes of the government, 
and is the exercise of a power not possessed by congress. Our 
position is tuUy sustained by legal adjudications, and the writings 
of eminent jurists. Chief-Justice Marshall, in his writings upon 
the constitution, has considered this point. He says, on page 
346 of his work: " It is, we think, a sound principle, that when 
government becomes a partner in a trading company, it divests 
itself, so far as concerns the transactions of the company, of 
its sovereign character, and takes that of a private citizen. 
Instead of communicating to the company its privileges and its 
prerogatives, it descends to a level with those with whom it asso- 
ciates itself, and takes the character which belongs to its asso- 
ciates, and to the business which it transacts. ♦ ♦ • 
As a member of a corporation, a government never exercises 
its sovereignty. It acts merely as a corporator, and exercises 
no other powers in the management of the afiBEurs of the 



0OLB FUSFOfiBB OF TAXATION. Ill 

eorpoTation than are expressly given bj the incorporation act 
The goTemment of the Union held shares in the old Sank of the 
United States, but the privileges of the government were not 
imparted by that circumstance to the bank." 

If there exists any authority in the general government to 
create a corporation for any purpose, it is in relation to the 
finances of the country. The necessity of a fiscal agent of some 
kind would seem to warrant the creation of a banking corpora- 
tion. But if the power is conceded, it does not follow that 
the people should be taxed to provide a bounty payable semi- 
annually, to the private companies who are enga^ged in banking, 
and who alone receive the profits arising from the business. 
Yet the act of congress creating the banks provides for the 
payment of semi-annual interest on the capital invested; and 
this interest is collected from the people. All railroad corpora- 
tions, created by act of congress, are absolutely private corpora- 
tions. The insertion in tlie charter of the words, "to secure 
the more safe and speedy transportation of the mails, troops, 
munitions of war, and government supplies," found in all of 
these charters, does not change the character of the corpora- 
tions. The grants are made to private parties; the roads are 
under their control; they receive aid from the general govern- 
ment, but in tlieir own names own and control the roads, and 
can, at any time, dispose of the roads and franchises, and the 
general government has no power to prevent any action the 
companies may choose to adopt so long they regard the 
provisions of tlieir charters. No statesman or jurist of our 
country has at any time until within the last few years, claimed 
that congress could create corporations for private purposes. 
On the contrary, in all of the earlier decisions of the federal 
courts, it was uniformly conceded that congress did not pos- 
sess the power to create such corporations. Chancellor Kent, 
Chief Justice Marshall, and other eminent writers are all ngrced 
that, under the constitution, congress cannot create a private 
corporation. If congress had no constitutional right to create 
railroad corporations, how can it possess the power to tax the 
people to pay their debts? Tlie people are now paying at least 
$8,000,000 per annum in sliape of taxes for the purpose of 



lis MONOFOIJBS AJSm THE FBOFLB. 

liquidathig the interest due from railroads chartered by < 
gress in violation of the fundamental law of the land. This 
large amonnt of taxes is collected and applied by the general 
government in payment of interest due from railroad compa- 
nies, becaase the influence of congressmen and their friends in 
these companies was sutheieDtly powerful to override oonstitn- 
tional barriers, and to procure the passage of an act enabling 
the parties holding the stock to pocket the earnings of their 
roads, and make good the deficit in their interest account by 
taadng the people. 

The whole history of congressional legislation does not pre- 
sent a case of such entire disregard of the provisions of the 
ccmstitution, and such dishonest and corrupt legislation as is 
contained in the acts of congress relating to the Pacific rail 
loads. It is questionable whether another instance can be 
found in this or any other country having a constitutional gov- 
ernment, where legislators, by direct vote, have taken millions 
<rt money from the public treasury, and given it to private cor- 
porations of which they were members and directors, and to 
make good the amount thus taken from the treasury have pro- 
vided by law for its collection from the people in the shape of 
taxes and duties! When we remember that congress does not 
possess the power to charter private corporations, that in so 
doing it violates the letter and spirit of the constitution, upon 
what principle can it claim the right to tax the people for the 
benefit of these private corporations? We repeat, no country 
in the world, governed by a written constitution, oflfers a paral- 
lel case. Not even in France, under the personal govern- 
ment of the late emperor, would such an unwarranted act have 
been attempted. 

We are aware that it is claimed that railroad corporations 
are public corporations — and this granted, taxes may be right- 
fully levied and collected for their benefit. But we do not grant 
this, and shall, in the following pages, essay to demonstrate 
tliat all railroad corporations are private, being owned and 
controlled by private citizens, and not by the state or national 
government. But admitting they are public and not private 
oorporations, the general government even then cannot legally 



0QLB FUBPOfiSS OF TAXATION. 118 

diarter or control them, because the power for that purpose 
has never been delegated by the states or the people; and it 
foUows that the general government cannot rightfully impose 
taxes upon the people for the support of corporations over 
which it can have no control. If congress can levy taxes for 
the construction and support of railroads, and take the man- 
agement and control of them, it certainly can take the entire 
supervision of all the highways in all the states, provide for 
their construction, and tax the people at vrill for that purpose. 
This being admitted, no local or police regulation in any of the 
states is exclusively under the jurisdiction of the state govern- 
ments; but the general government may at any time take the 
absolute control of the governmental affairs of the several 
states, and thus complete the centralization of power now so 
rapidly developing in all the departments at Washington. The 
assumption of the right to tax the people for any and every 
purpoee that to congress shall seem expedient, irrespective of 
constitutional prohibition, is at once destructive of the rights 
that were supposed to be guaranteed and preserved to the 
whole people by the constitution. If the will of those men who 
happen to occupy seats in congress (and that will too often 
controlled by personal interest) is to govern, then all constitu- 
tional government is at an end, and the liberty and property 
of the citizen have no constitutional safeguard. Taxes to the 
entire value of all the wealth in the country may be levied by 
the general government, and the citizen of this republic holds 
his entire estate at the will of the persons who fill the oflices 
of the country. Under the system of congressional legislation 
that now obtains, the laboring and producing classes are being 
rapidly reduced to a state of servitude that would grace the 
most despotic government. 



8 



CHAPTER XII. 

THE BIGHT OF EMINENT DOMAIN — UNOONSTITDTIONALmr OF MITNIGr- 
PAL AID TO RAILROADS. 

THE question of taxation for the benefit of private corpora- 
rations has agitated the public mind since the construction 
of railroads became one of the admitted necessities of the 
country. For the purpose of justifying and legalizing gov- 
ernmental aid to railroad corporations, in the various forms in 
which such aid has been afforded, the doctrine has obtained 
among the advocates of the measure that raiboads are public 
highways, as well as a public necessity; and such being the 
fact, that aid in the shape of grants, taxes, and subsidies, are 
legal, legitimate, and proper. They draw an argument in 
favor of this doctrine, from the fact that legislatures, state and 
national, have provided by law for the condemnation of private 
property, for the use of the companies, respectively, upon pay- 
ing the assessed value thereof; and that thus the right of emi- 
nent domain is vested in these corporations; that the right of 
eminent domain is an attribute of sovereignty, and that the 
granting of this attribute to corporations imparts to them the 
chai'acter of public highways. They reason that because they 
are public highways, and the companies owning them are com- 
mon carriers, taxes may be legally levied and collected for the 
exclusive use of these companies. They claim tliat because the 
United States, states, counties, cities, towns, and townships, 
have authority to construct, or to aid in constructing, common 
highways, they have the same right to construct or aid in con- 
structing railroads. 

If it were not that precedent has tended to sustain this " false 
doctrine," we would not think it profitable to combat it. The 
only point in the argument in favor of this doctrine that has 
any real foundation is that railroad companies are allowed to 

(114) 



AID TO RAILBOAD8 trN002»ITnniONAL. 115 

locate their roads where they please, upon payment of the 
damages assessed in the manner prescribed by statute. The 
answer to this is, that railroads could not be built, unless the 
companies had permission to pass over the lands of private citi- 
zens. If the title from each land owner could be procured 
only by negotiation and purchase, no railroad could be con- 
structed, for the reason that a direct or continuous line for a 
road could rarely be secured. Kailroads are constructed to aid 
in the transportation of freight and passengers from one part 
oF the country to another; to promote commerce throughout 
the whole country; to supply the wants of a people just as a 
mill or factory supplies the wants of a particular locsdity. The 
miller constructs his dam across a stream, and under the stat- 
Qtee of most of the states, he can procure the condemnation of 
the land of his neighbor overflowed by his dam, to his own use, 
upon payment of the damages assessed. It is not a condemna- 
tion for the use of the public, but for the use and benefit of the 
owner of the milL The mill itself, while it is owned by a pri- 
vate individual, and can be sold and transferred by him at any 
time, is also a public benefit. Can it be said that the right of 
eminent domain attaches to the mill or its owner? So with 
railroads — they are owned by private companies ; are built and 
controlled by them; they are of public benefit, but not owned 
or controlled by the public or by the state, or local authority, 
as in the case of public highways. Their private owners can 
sell them, with all their franchises, rights, and privileges. The 
rules for their operation, rates of charges, and all other matters 
affecting their government, are exclusively under the control of 
the parties owning them. Only that the companies may become 
the owners of the necessary grounds over which to build their 
roads, have legislatures provided that they may enter upon 
lands owned by private persons, and upon the payment of the 
appraised value thereof, appropriate a narrow strip (the width 
being fixed by statute) for the puqjose of locating their road 
upon it It is not condemned for public use, as in the case of 
a public highway, or where land is needed for public buildings, 
or any other public purpose. The assessed value is not paid 
by the government, or from the public fund, nor by individuals 



116 MONOFOLEBB AKD THB FBOFI& 

for the pubKc; bnt by the private corporation out of its own 
pnrse, and for its own gain. 

This is what is called, by the advocates of the measnTOy 
"the right of eminent domain," a right that only belongs to 
the supreme government. This power cannot be exercised by 
local or subordinate governments, unless it is delegated to them 
by the supreme or superior government. While the courts in 
some of the states, Iowa included, have, by decisions, made this 
right of eminent domain attach to railroad companies, it cannot 
be supported on principle. » To allow it to obtain is to clothe 
private corporations with the attributes of sovereignty. But 
conceding that this right attaches to these corporations, upon 
no principle of constitutional law or justice can the right to 
levy taxes upon private citizens to aid in the construction of 
railroads, either by acts of congtess, by state statutes, or by 
local municipal government, be supported. And it matters 
not in what form these taxes are imposed upon the people, 
whether in the shape of municipal subscriptions of stock, to 
be paid by assessments upon the people; by donations of land 
or money, to be repaid by imposing a larger price upon lands 
sold to the citizen; by indirect taxation, or by special local 
elections held in cities, towns, or counties, — the compulsory 
taxation of the property of individuals, under our system of 
government, can only be imposed for governmental or public 
purposes. Taxes are levied for the support of the government 
in all its departments; for the construction and repairing of 
highways ; for the building of school houses and all other edifices 
of a public character; for the support of schools; for the 
necessities of local municipal governments, and for other 
objects having the public weal for their sole consideration. 
These taxes are legitimate and proper, because the end sought 
to be reached by such taxation are for the use and benefit of 
the whole people, and for the protection of their rights. For 
all of these purposes the legislature can provide an uniform 
system of taxation. But when the government attempts to 
compel A to pay a tax to assist B and C in building a railroad^ 
it enters upon the exercise of a despotic and oppressive power^ 
that is in oonfliot with the letter and spirit ci oar oonstitB* 



AID TO' HAn.BOATifl wso omoxmio sfAL, vn 

HeiDBj both state and nationaL The legislature, by thApafisago 
of such a statute, says, in substance, to the tax payer: ^ A 
oompany is formed for the purpose of building a railroad 
which passes through the county in which you reside. This 
oompany has not sufficient means for constructing and stocking 
its road. That the necessary means may be famished to it for 
that purpose, you must pay a tax upon your property, amount- 
ing to one tenth or one twentieth of its value; this amount you 
must donate to the company. True, you will have no interest 
in this road when it is completed; you will not be a stock- 
holder; you cannot ride in its cars, or ship your freights over 
the road without paying the same price as other persons. It 
may cause you to sacrifice a part of your property to pay this 
tax, but the road will be of great advantage to the public, and 
jou must make this donation to help the enterprise." The 
consequences flowing from this unjust and oppressive system 
of taxation are appalling. It has no foundation in right or 
justice. The legislature has no inherent right to impose taxes 
for any purpose. The authority to levy taxes is dependent 
upon the power delegated by the people as contained in the 
fiondamental law. In a republic even a majority of the people 
do not possess the inherent right to tax the minority for pri- 
vate purposes. Such taxation can be imposed by no other 
government than a despotic one, where the will of the despot 
is the supreme law, and where might rather than right is the 
controlling power. So conscious are the advocates of this 
species of taxation of the fact that taxes can be levied for 
public purposes alone, that they deem it all-important to 
oonnect and blend in one — the right of eminent domain and 
taxation. 

But this position is not tenable. Bouvier defines the term, 
** Eminent Domain," as follows: " The right which the people 
or government retains over the estate of individuals, to resume 
the same for public use." Taxes are defined to be burdens or 
charges imposed by the legislative power of a state, upon per- 
sons or property, to raise money for public purposes* It will 
be seen tliat there is a wide distinction between the taxing 
power and the right of eminent domain; that while they both 



118 MONOPOUEB AND THE FBOFUL 

appropriate private property for public ases, they differ in 
degi'ee. While the right of eminent domain takes from the 
private citizen the absolute title to property upon just and 
fair compensation, taxation exacts from each property owner a 
contribution for the support of the government, or for the 
benefit of the public, without any other compensation than 
the protection the government affords him in life, liberty, and 
property. Contribution for this purpose is a duty imposed 
upon all who are under the protection of government A 
complete power to procure a regular and adequate supply of 
revenue forms an indispensable article in our constitution; and 
provisions for levying and collecting this revenue is a charge 
laid upon the legislative department. The levy and collection 
of all taxes deemed necessary for the administration of the 
government and for the public good, is an incident of sover- 
eignty; but this does not extend to the levy and collection of 
taxes to aid private interests or enterprises. The taxing power 
is limited; the needs of the public fix this limit. When this 
is passed, the citizen is subject to continual plunder. The 
value of his property is destroyed; he is but a trustee holding 
his property subject to the will of an arbitrary power, that can 
at any moment call for a part or all of it. He had entered 
into a governmental contract for the purpose of appealing to 
the strong arm of constitutional law when his rights are 
assailed, but finds, instead of the protection he had reason to 
expect, an irresponsible, arbitrary power, compelling him to 
divide his property with railroad corporations, or other private 
parties, without any consideration; not only without consid- 
eration, but the taxes illegally and forcibly taken from him are 
used to build up and protect a monopoly that is blasting the 
fruit of his labor, while it is as surely destroying constitutional 
and republican government. His property is taken from him 
by what can only be termed a superior, despotic power, and 
appropriated without his consent for the benefit of a private 
corporation. 

It is not difficult to distinguish what are proper objects of 
public support and for which taxes can be levied and collected 
from those that are not, if we keep in sight the fundamental 



AID TO BAILB0AD8 UHO UlMtfiTrUTl OKAL. 119 

or organic law. In the formation of a republic no new rights 
are created. The adoption of a constitution is but declaratory 
of pre-existing rights and laws; its object is to define and limit 
the powers of the government, and to guard and protect the 
rights of the citizens. An eminent jurist, in speaking of the 
constitution, uses the following clear and forcible language : 
" It is not the beginning of a community, nor the origin of 
private rights; it is not the fountain of law, nor the incipient 
state of fivivernment; it is not the cause, but the consequence, 
of person^ and political freedom; it grants no rights to the 
people, but is the creation of their power, the instrument of 
their convenience, designed for their protection in the enjoy- 
ment of the rights and powers which they possessed before 
the constitution was made; it is but the frame- work of the polit- 
ical government, and necessarily based upon the pre-existing 
condition of laws, rights, habits, and modes of thought. There 
is nothing primitive in it; it is all derived from a known 
source. It pre-supposes an organized society, law, order, 
property, personal freedom, a love of political liberty, and 
enough of cultivated intelligence to know how to guard it 
against the encroachments of tyranny. A written constitution 
is, in every instance, a limitation upon the powers of the gov- 
ernment in the hands of agents, for there never was a written 
republican constitution which delegated to functionaries all 
the latent powers which lie dormant in every nation, and are 
boundless in extent, and incapable of definitions." Keeping 
in mind the distinction existing between measures of a gov- 
ernmental or public nature, and those that are private, and 
applying the above quoted definition of constitutional power, 
we cannot find it difficult to determine what are, and what are 
not, constitutional levies and collection of taxes. 

Another thought having weight in connection with the con- 
stitutional right to tax the people in aid of railroads, is, that 
minorities have the right to live, and to own and enjoy prop- 
erty; and the majority has no right to compel the minority to 
contribute aid to railroad corporations. It has always been 
conceded that in a republican government the majority should 
rule, and that their will expressed in a constitutional and 1 



190 X0S070UBB ASD THB: BSOPIM. 

maimer should be the law of the land; yet no one Al««iing to 
respect constitutional law will contend that this will of tfatt 
majority can act oatside or independent of oonstitational 
restrictions. If this doctrine should obtain, eonstitational 
government is at an end; private rights are destroyed, and the 
unrestricted will of a bare majority becomes supreme; all the 
guarantees of the constitution are annulled; life, liberty and 
property are all dependent upon the popular will; oonstita- 
tional safeguards are destroyed, and the stability of the govern- 
ment is lost. The first step in this direction is fraught with 
the greatest danger. When the restrictions embodied in the 
constitution are overridden and disregarded in one instancy 
it affords a precedent for a second step in the same direction. 
Acquiescence in encroachments upon constitutional restric- 
tion by the people, undermine and absolutely destroy republic 
can institutions and the government itself. K, for the accom- 
plishment of some private purpose, a community, a state, or 
the general government disregard the provisions of the con- 
stitution, and assume powers not granted them by that inatra- 
ment, they arbitrarily act the part of the absolute tyrant. 
And it makes no difference whether the cpurse pursued, or the 
measure adopted, proves beneficial to the public, or oppressive. 
In the fact that it is the usurpation of an unauthorized power, 
lies the danger. The disregard of the limits fixed by the con- 
stitution, in the administration of the government, destroys 
the only guarantee the people have for the protection of their 
private rights. Among all the unconstitational measures 
which now obtain throughout the country, the affording of aid 
to railroads, by the government, state and national, has proved 
the most burdensome to the people. Of this class of subsidiea, 
that afforded by local municipal subscription, with or with- 
out a vote of the people, has caused the greatest injury. A 
local or municipal government can lawfully impose taxes for 
the support of its administration, and for contribution to the 
general comfort and happiness of the people. It can tax for 
the purpose of laying out and constructing streets and public 
highways, because these objects are intended to be, and in £act 
are open to the use of the whole people; all can uae them on 



AID TO EAnXBQADS UJSOOKSnTirnQNAL. 121 

ecpud termfl; thej are made for the benefit of the public; each 
citizeii has undertaken to contribute his just proportion of the 
expense of providing for the common, public benefit. But 
when a oountf , a city, town, or township, organized for the con- 
venience of the people, and to more effectuallj protect their 
rights, attempts to become a stockholder in a railroad corpor- 
ation, it attempts the exercise of a power it does not and 
cannot possess under the constitution. Municipal corpora- 
tions were not created for the purpose of private speculation 
or private gain, but for purely and strictly government 
purposes. No power is granted, (nor can it be implied,) to 
oonntf judges, commissioners, or supervisors, nor to township 
trostees, or city boards, to take stock in railroad corporations, 
or to issue bonds of the municipality in payment for such 
stock, for the reason that such power is not necessary for the 
administration of these several governments, and does not 
come within the limit of the powers granted by the people. 
We know there are many decisions of courts sustaining the 
podtion that municipal corporations can become stockholders 
in railroads, and may issue bonds in payment therefor, and 
that it is within the scope of the powers vested in such corpo- 
rations to levy taxes for the payment of the bonds so issued; 
but we have yet to see a decision that is sustained by any pro- 
vision of the constitution. Many of these decisions admit 
that the right to subscribe stock is not contained in the con- 
stitution and cannot be justified on constitutional grounds. 
Of these decisions we shall speak hereafter, and we leave them 
for the present We insist that there is no authority in the 
constitution, state or national, under which any department 
of any of the governments can become stockholders in a rail- 
road corporation; nor is the right to take such stock in 
accordance with the genius or spirit of republican government. 
The distinction that exists between cities and towns acting 
under charters, and counties, townships, school and road dis- 
tricts, is marked, and should be kept in mind in considering 
the nature of the powers possessed by each. County, town- 
ship, school, and road district organizations are necessary in 
the administration of the laws of the state. They are at most 



122 MONOPOLIES AND TUK PBOPLB. 

but quad corporatione; all their powers are dwived from, and 
executed under the general statutes of the state. They have 
no special grants or privileges, but are the chosen means for 
executing state laws. In the distribution of the powers and 
duties vested in and imposed upon the state govemm^its, the 
duties of administering the local affairs of the oountiea, town- 
ships, and districts, are delegated to, and imposed upon these 
qtiasi corporations respectively. They can only exercise such 
powers as are necessary for the accomplishment of the objects 
of their creation. Their acts are the acts of the state goyem- 
ment as applied to their respective localities. They are not 
clothed with any extraordinary power; nor can the state gov- 
ernment delegate to them a power it does not itself possess. 
When the constitution of a state, (as in the case of Iowa and 
other states,) prohibits the state from subscribing stock, loan- 
ing its credit, or issuing its Wr'^At^ to private corporations, we 
would at once conclude that it cut^.^ .. jgate authority to 

one of its subordinate departments to do an act forbidden to 
itself by the constitution. But this is what it has done, if these 
qiuisi corporations possess the power to afford aid to railroad 
or other private enterprises. Municipal corporations, such as 
cities, towns, etc., act under special charters, and in some 
respects are sovereign. But they are governed and controlled 
as absolutely by the provisions of their charters as is the state 
by its constitution. They can only act within the scope of 
their delegated powers, and in all doubtful questions the pre- 
sumption is against their right and in favor of the public, for 
the reason that only special privileges are conferred upon 
them. Nor can the legislature confer upon them privileges 
or powers not possessed by itself under the constitution. It 
is then absolutely certain that neither counties, cities, nor 
towns, can aid private corporations, or become stockholders in 
such corporations, unless the power has been delegated to 
them by the state legislature. It is equally certain that unless 
the state, in its sovereign capacity, possesses this power, it 
cannot delegate it to either counties or cities, and that when 
the constitution of a state forbids the exercise of a power, it 
includes the legislature, all the departments of the state gov 



AID TO RAILBOADe UNGONOTITUTIONAL. 123 

emment, all (Jbunties, cities and towns, and all the people. 
All these corporations are agencies in the administration of 
the affairs of the public. Being political in their nature, thej 
are entirely distinct from private corporations organized for 
the purpose of pecuniary profit. They are established for 
public purposes exclusively. Judge Dillon, in his valuable 
work on municipal corporations, says that ^^ They can exercise 
the folloMring powers and no others: First, those granted in 
express words. Second, those necessarily or fairly implied, or 
incident to the powers expressly granted. Third, those essen- 
tial to the declared objects and purposes of the corporation -^ 
not simply convenient, but indispensable." The same author, 
in treating upon aid to railroads, while admitting that the 
current of judicial decision is in favor of the principle that in 
the absence of special constitutional restrictive provisions, it 
is competent for the legislature to grant this power to muni- 
cipal corporations, says that " Notwithstanding the opinions 
of so many learned and eminent judges, there remains serious 
thought as to the soundness of the principle, viewed simply 
as one of constitutional law. Eegarded in the light of its 
effects, however, there is little hesitation in affirming that this 
invention to aid private enterprises has proved itself baneful 
in the last degree," and he adds: "Taxes, it is everywhere 
agreed, can only be imposed for public objects, and taxation to 
aid in building the roads of private railway companies is 
hardly consistent with a proper respect for the inviolability 
of private property and individual rights. Fraud usually 
accompanies its exercise, and extravagant indebtedness is the 
result, and sooner or later the power will be denied either by 
constitutional provision, (as in Pennsylvania, Ohio, and Illinois, 
it already is,) or by legislative enactment." 

As we are now dealing with constitutional rights, and not 
with judicial decisions, we think we have fully shown that 
public or municipal coqx)rations have no authority under the 
constitution to aid railroads by subscription of stock, or the 
issue of bonds, and that no authority exists for taxing the 
people to pay for such stock or bonds; and if it be true that 
oounties and cities are not, and cannot be clothed with the 



124 MONOPOUBP AND THE PEOPLE. 

power to aid in the prosecution of private enterprises, it is 
equally true that the legislature cannot delegate to the 
majority of the voters of a county, city, township, or dlBtrict, 
the authority to tax the minority for the same purpose. Leg- 
islatures cannot create new powers; they can only exercise 
such as they possess under the constitution. The powers not 
delegated by the people in the fundamental la#, are retained 
by them. If the people are sovereign, th^y are the source of 
power, and all that is not vested in some department of the 
government remains vested exclusively in the sovereign. If 
the legislative, executive or judicial department of the govern- 
ment can act independently of the restrictions and prohibi- 
tions contained in the constitution, then the wiU of the servants 
of the people is the supreme law, and the sovereign power 
supposed to reside in the people is destroyed, and constitu- 
tional government is at an end. Oppressive taxation imposed 
without authority, for private and selfish ends, if persisted in, 
will eventually subvert our republican institutions. This, and 
other unconstitutional legislation, to some of which we have 
already referred, has caused such a departure from the old 
landmarks that it is questionable if we now have, in &ct, a 
republican government. Under the rules adopted in legisla- 
tion, and the pliant decisions of courts, constitutions are made 
to yield to the demands of combinations, stock-jobbers, and 
private corporations, until we cease, as a people, to revere and 
respect these safeguards of our liberty 



CHAPTER XIII. 

FATAL FOLIOT OF HORTQAOINO CrnEB AND OOUMTIEB FOB 
OONSTBUOnON OF RAILROAD& 

THE justification for the munificent grants and lavish 
taxation of the people in aid of railroads has been, that 
these roads afford the necessary facilities for transportation of 
freight, promote speedy communication throughout the country, 
provide ready markets for the products of husbandry, increase 
the value of property in their vicinity, and assist in improving 
and developing the new portions of our country. While some, 
or all, of these objects may have been in a degree promoted, 
the little good thus accomplished has been more than counter- 
balanced by the evils uniformly attending this species of aid 
to railroads. What are the evils incident to the general incor- 
poration acts, and local taxation in favor of railroads ? 

FxtbL They take from the individual the natural and con- 
stitutional right of owning and controlling his own property, 
and license the agents of a cx>unty, city, or town, to incumber 
his property with a debt, without his consent and against his 
protest. 

Second, The policy engenders a rivalry l)etween different 
localities, causing reckless extravagance and the creation of an 
immense indebtedness by public corporations. Tliis indebted- 
ness not unfrequently retards the settlement of tlie locality 
expected to be benefitted, and depreciates instead of enhancing 
the value of property, for the constant and c/)mpiilsory drain 
of the resources of the j)lace in payment of the debt thus 
created can leave nothing but barrenness l>ehind, the rule 
being, with but few exceptions, that non-residents hold XhR 
evidences of the indebtedness, and as a consequence, payment 
mn«t be made to distant creditors. If one thinks that this ii 
overdrawing the picture, let him examine the condition of thott 

(125) 



126 MONOPOLIES AND THE FBOFUB 

oounties and cities that years ago loaned their credit to railroad 
companies, or subscribed to their capital stock. Localities 
less favorably situated, with fewer natural advantages, fewer 
miles of railroad, and with less productive countries tributary 
to their growth, have far outstripped their bonded neighbors 
in wealth, improvements, and the increased value of their 
property. Persons who are seeking locations dread and shun 
these hond-eursed localities, and seek homes elsewhere. New 
counties far outstrip these old ones in improvement and 
wealth; new towns and cities spring up and destroy the 
business of these old bond-ridden ones, and the latter, instead 
of receiving the anticipated and promised increase of wealth, 
show a paralyzed industry and depreciated property. Localities 
that fifteen or twenty years ago gave promise of prosperous 
future, are less wealthy, less prosperous, and in some instances 
less populous than when they subscribed stock, and issued 
bonds to railroads. For years to come, the wealth and indus- 
try of these places must suffer from the incubus of enormous 
taxes levied for the payment of bonds issued under the 
mistaken idea that great benefit was to result from the 
indebtedness. 

Thi/rcL It places the pecuniary interests of all the people 
of the counties and cities creating this kind of indebtedness in 
the hands of unscrupulous and relentless non-resident credit- 
ors, mainly Wall street stock-jobbers, who obtained it at large 
discounts, often at one-fourth its par value, and who own not 
only the county and city bonds, but control the railroads in aid 
of which they were issued, and so by constantly collecting 
from the people the oppressive taxes required to pay the inter- 
est and principal of these bonds, withdrawing the amounts so 
collected from circulation and sending it to the east without 
leaving, or ever having paid any equivalent, they are con- 
stantly impoverishing the people with the very means which 
were to have been sources of prosperity. 

Fourth, The aid granted to railroad companies has enabled 
them to get control of the commerce of the country. As a 
^neral rule, all of the railroads receiving subsidies in land, 
government, state, county, and city bonds, and large gifts in 



RAILBOAD MOBTGAGE8 ON OOXn^TES AND CTnBS. 127 

loeal taxes, have been owned or controlled by the same class 
of men, and not a few of the roads by the same ring or com- 
bination. Then speculators have visited all parts of the 
conntry, claiming to be men of " large hearts " who desire to 
benefit mankind. They talk of their large experience in rail- 
road matters; of the great benefit the particular locality will 
derive from the construction of a certain line of road ; of the 
great profit to be returned in the shape of dividends if local 
aid is voted, and after having by fraud, falsehood, and willfiil 
deception induced the people to move in the matter, they then 
turn their attentions to state legislatures and to congress for 
more aid, and so perfect is their combination, that in almost 
all their attempts they are successful. Among these rings and 
combinations are found men to fill every department in the 
sdieme for plundering the people. Some of them become 
directors in the corporation to which the aid is voted and 
granted, and they thus get control of the donations, grants, 
and bonds. Some members of the ring become agents to sell 
the bonds of the corporation, as well as any others received 
from the general or local government, and to mortgage the 
lands granted to the companies. Still another division of the 
ring become the purchasers of the bonds at their market value. 
"Hiey all unite in this way and mortgage their roads, rights, 
and franchises, and construct the road, taking care that when 
the road is completed, the liabilities resting upon it shall be 
sufficient to represent its entire value. By this means they 
become the creditors of the counties and towns through which 
the road runs; they own and control the road; and the com- 
bination being the same substantially throughout the country, 
owning and controlling all the roads, holding and using the 
subsidy bonds, fixing the rates of freight and passenger 
transportation, they control the whole country and hold the 
best interests of the people subject to their will. In the prose- 
cution of their ends they bribe local officers, state legislatures, 
and members of congress. To secure the election of their 
friends to congress, large gifts are made. In one instance one 
of tiiese raiders upon the rights of the people bestowed upon 
a prospective United States senator ten thousand dollars for 



188 MOKOPOLIBS AND THE FBOFLB. 

the purpose, as he stated, of Becuring friendly legislation for 
a certain railroad company. The pirates and robbers who piey 
upon mankind are not more dishonest or nnscmpnlons than 
are these rings who make the people their prey. They differ 
only in the degree of punishment received; the former being 
executed or sent to prison, while, of the latter, many are 
elected to congress or to other high and responsible offices, or 
they are appointed to high places of trust and profit in' the 
government. If the reader will look through the JSaUrotul 
Manual^ he will find a long list of names of men, prominent 
now from the recent raids upon the people and public treasury, 
who have been engaged in the same business for at least twenty 
years; men whose names are now as familiar to the western 
people as " household words," who, like birds of prey, have 
flitted from one part of the country to another until their 
blighting influence is felt in the whole land. We are referring 
of course to the men who have followed the business of 
" organizing " railroad companies for the purpose of procuring 
aid ill lands, bonds, and taxes, and who have devoted their 
energies to this class of railroads, and not to those capitalists 
who, with 4;heir own money and credit, have constructed their 
roads and pursued a legitimate busines. Prominent among 
the men who have devoted their time and talents to railroad 
enterprises, will be found the names of Thomas C. Durant, 
John A. Dix, Henry Famham and others, whose memory will 
remain fresh with western men, because of their diligence in 
procuring local aid to roailroad companies from counties and 
cities fifteen or twenty years ago, and who, after obtaining 
such aid, by some means become the owners of city and county 
bonds, to a large amount, and then to prompt the people to 
greater diligence in the payment of taxes, levied to liquidate 
these bonds, applied to the president of the United States for 
troops to aid in their collection. Slightly varied, the same 
organization of men which inaugurated the system of con- 
structing railroads through land grants, donations, and subsi- 
dies, is still in the same business. With their headquarters in 
New York and Boston; with Wall street as the principal depot 
tot all railroad stocks and bonds, as well as the bonds of the 



IIAILBOAD MORTaAGES ON OOUiniBS AKD GITIB8. 1S9 

United States, and of such states, oonnties, and cities as haye 
1)een dnped by them, these raiders npon the treasnry and 
x«80tiroes of a people have taken the absolute control of the 
TBilroad interests of the conntry, and " run it " for their own 
ezdnsive benefit, to the injury of the conntry and the absolute 
deBtmetion of the agricultural interests of the great west. By 
Iiavinfi^ placed in their hands the large grants of land and sub- 
sidies voted to railroad corporations, they acquired the means 
of controlling the principal roads throughout the country. 
lioads in Texas, Louisiana, Alabama, Arkansas, Kansas, 
Nebraska, Iowa, and in other states and territories, are owned 
and managed in the exclusive interest of capitalists in eastern 
citieB who have no interest in the communities where these 
roads are located, save to realize large dividends by extortions 
and oppressions. All of the roads receiving large grants and 
subsidies, whether from the general or state government, or as 
local aid, are in the hands of this class of men, with their 
fiscal and transfer agencies in the cities above named. 

This statement has its illustration in the Kansas City, St. 
Joseph & Council Bluffs company, which has five directors in 
Boston, two in New York, one in Michigan, and one in Mis- 
Bouri — Fiscal agency and transfer office, Boston. Peoria & 
Bureau Valley company has its principal office in New York; 
Chicago & Northwestern — Financial and transfer office, Wall 
street. New York; Dubuque & Southwestern — all of the direc- 
tors, save one, and its financial agenc^y, in New York; Atchin- 
Bon, Topeka & Sante Fe company — Fiscal agency and transfer 
office, Boston; Galveston, Harrisburg & San Antonio com- 
pany — Fiscal and transfer agency, Boston; Leavenworth, 
Lawrence & Galveston company — Fiscal agency and transfer 
office, Boston; Kansas City & Sante Fe company — Fiscal and 
transfer agency, Boston; Cedar Falls & Minnesota company — 
All of the directors reside in New York; Iowa Falls & Sioux 
City company — Of the directors, John B. Alley, Oliver Ames, 
P. 8. Crowell, and W. T. Gilden, reside in Massachusetts, J. 
L Blair in New Jersey, and W. B. Allison and Horace Will- 
iams in Iowa — Fiscal and transfer agency, Boston, Colorado 
OeQtral company — Of the directors, Oliver Ames, Frederick 
9 



180 MONOFOUEB AND THE PEOPLE. 

L. Ames, and four others reside in Massachusetts, the Fiscal 
agency is in Boston, and the principal office in Califomia; 
Cedar Bapids and Missouri River company — John B. Alley, 
Oliver Ames, and nine others of the directors are in the eastern 
states, and James F. Wilson, and three others, are of Iowa; 
Northern Pacific company — Principal office, New York; Han- 
nibal & St. Joseph company — Fiscal and transfer office. New 
York; Burlington & Missouri River company — Fiscal and 
transfer office. New York; Union Pacific (central branch) — ^AU 
but two of the directors in Washington and the east, and the 
principal office in New York; Union Pacific — Among the 
directors are Oliver Ames, Oakes Ames, and eleven others in 
New York and Massachusetts, one in Illinois, and G. M. Dodge 
in Iowa — Fiscal agency, Boston; transfer offices, Boston and 
New York; Fremont, Elkhorn & Missouri Valley company — 
John B. Alley, of Boston, John I. and D. C. Blair, of New 
Jersey, C. 6. Mitchell, of New York, and three Cedar Rapids 
men, directors (this is a part of the Sioux City & Pacific road); 
Winona & St. Peters company — Fiscal and transfer office. Wall 
street, New York; Burlington & Missouri River (in Nebraska) 
— Principal office, Boston ; Sioux City & Pacific company — 
Directors, Oakes Ames, and six others, in the east, and G. M. 
Dodge, of Iowa — Fiscal and transfer office, Boston ; Missouri 
River, Fort Scott & Gulf company — Fiscal and transfer 
office, Boston; Central Pacific company — local offices, San 
Francisco and New York; *New Orleans, Mobile & Texas 
company — Oakes Ames and twelve other directors, resident 
in New York and the east, and two in New Orleans; principal 
office. New York; Houston & Texas company — Fiscal agency 
and transfer office. New York; Chicago & Northern Pacific 
Air line company — Principal office. New York; Elizabeth, 
Lexington & Big Sandy company Principal office. New York; 



*NoTB. — ^This company has a donation from the state of Louisiana of 
$8,000,000; a sabecription of stock by the same state of $2,500,000; and the 
same state has indorsed the company*s bonds to the amount of |12,500 per 
mile. This company has also received other large sums in municipal aid 
and other donattons. 



RAILBOAD MOET6AOR8 ON OOUKTIEB AND OniBS. 131 

Dubuque & Sioux City company — General offices, Dubuque, 
Iowa, and New York. * Texas & Pacific company — Princi- 
pal office. New York. 

We might continue the above list indefinitely, but think we 
Lave extended it sufficiently to sustain our charges. If the 
reader is desirous of learning who compose these various com- 
panies, the RmVroad Moumial will disclose the same set of 
leading men, divided into three or four principal squads or 
companies, who raid from one end of the country to the other; 
control all the roads that have received aid, and at once place 
them under the direction of the central railroad combinations 
in Boston and New York; diverting the grants and donations 
supposed to have been made for the benefit and in the interest 
of the people, to their own selfish purposes; making the aid 
thus granted a means of oppression to the people, rather than 
sn agency for their relief. 



* NoTS.-^Thia company has a grant of 18,440,000 acres of land and other 
aid. 



CHAPTER XIV. 

THE DCPOYKRISHINO TRANSFOBTATION SYSTEM. — THE WABBH0U8B 

CONSPIRACY. 

0!NE of the great evils resulting from this bonded sabsidy 
system of building railroads, is that it gives to those who 
manage them the control of the whole carrying trade of the 
country, and enables them to impoverish the great agricultural 
population of the west and south. The wealth of the United 
States lies in its agricultural products. The greater portion of 
the people are engaged in agricultural pursuits. Qood markets 
and cheap fi^ights are of the utmost importance to agricnltura 
However abundant may be the crops, unless a market can be 
reached without a sacrifice of one-half the product in the shaj^' 
of freight and commissions the husbandman will be impover- 
ished. If the farmers, the tillers of the soil, do not receive a 
fair remuneration for their work, all other industrial interests 
will suffer with them; anything that tends to deprive the pro- 
ducer of the value of hi ft product, tends to the impoverishment 
of the whole country. Any system of laws, regulations, by 
government or combinations of men, or corporations, that are 
oppressive to the produc>er, oppress the whole people. It mat- 
ters not whether these oppressions are in taxes, tariffs, or 
charges for the transportation of the farm product; no matter 
in what shape it comes, the result is the same. The great 
oppression now being practiced upon the people is in the enor- 
mous charges made by railroad companies for carrying freight. 
The charters, grants, subsidies, and privnleges given to those 
companies have enabled them to organize a powerful monopoly, 
through which they demand and receive for transportating 
meats, grains, and other farm products from the west to the 
eastern markets, at least one-half the value thereof The 
charges of these monopolies are arbitrary, and often fixed b/ 



TRANBPOBTATION AND STOOGE. 18S 

the yalne of the different kinds of grain carried by them. For 
instance, they charge one- third more per ton for carrying 
wheat from the west to the east than for com and oats; it 
being worth more in market, they ask a larger dividend from 
it. It can be carried as cheaply as oat^ or corn, but because of 
its value, will bear a greater charge, and still leave one-half of 
its value for the producer. There is no good reason why a 
railroad company should charge thirty cents per hundred for 
carrying wheat from Muscatine (Iowa) to Chicago, when it 
charges but twenty cents for carrying oats and corn over the 
same road, the same distance. Yet such is the fact. Those 
wlio are in the interest of these monopolists talk about cheap 
freights; they argue that railroads can transport freights much 
cheaper than it can be done over ordinary highways. Let us 
turn again to the Railroad Manual^ and eee how the matter 
is treated. Says the author : " The cost of transporting Indian 
com and wheat over ordinary highways will equal twenty 
cents per ton per mile. At such a rate, the former will bear 
transportation only 125 miles to a market where its value is 
equal to seventy -five cents per bushel; the latter only 250 miles 
when its value is $1.50 per bushel. With such highways only, 
our most valuable cereals will have no commercial value out- 
side of a circle having radii of 125 and 250 miles, respectively. 
Upon a railroad the cost of transportation equals one and one- 
fourth cents per ton per mile. With such a work, conse- 
quently, the circle within which corn and wheat at the price 
named, will have a marketable value, will be drawn upon radii 
of 1,600 and 3,200 miles respectively. The arc of a circle with 
hradvus of 125 miles is 49,087 square miles; that of a circle 
drawn upon a radius of 1,600 miles is about 160 times greater, 
or 8,042,406 square miles. Such a difference, enormous as it 
is, only measures the value of the new agencies employed in 
transportation, and the results achieved compared with the 
old.'' 

Here the fact is acknowledged that freights can be trans- 
ported over railroads for one and one-fourth cents per ton per 
mile. At this rate, a ton of freight transported from Muscia- 
tine, Iowa, to Chicago, would cost less than $2.50 This is 



184 MOHOPOLIEB Aim THE FBOFLK. 

wliat the advocates of aid to railroad companies publish to the 
world as a fisLCt^ and from it deduce the argument in &vor of 
increased facilities for their construction, with greater privi- 
l^es to be granted to the companies constructing them. The 
same rate of charges for transportation from the state of Iowa 
to the city of New York would not amount to more than from 
twelve to fifteen dollars per ton, and would allow the producer 
a &ir price for his product But while it is admitted that the 
above stated amount will compensate the railroads for trans- 
porting freights, the amounts actually charged range from 
twenty -five to fifty dollars per ton from Iowa to Chicago, with 
a proportionate increase to Now York and other eastern cities. 
Where commerce is open to competition, a fair remunerative 
price for carrying freights is all that is demanded or paid. If 
the railroads of the country were not owned and controlled by 
the same combinations; if they in any degree answered the 
ends anticipated by the public when their charters were granted, 
and privileges were bestowed upon the companies constructing 
them, these excessive charges would not be made or paid. 

We have attempted to show that all the railroads in the 
country are owned, contn>lled, and operated in the interest of 
eastern capitalists, with their headquarters in New York or 
Boston; and that the only interest these capitalists have in the 
producer is to extort fri)m him all they can get, even at the 
risk of ruining the whole country. Tliese monopolists, taking 
advantage of the great privileges granted tliem, and of the 
necessities of the agricultural and producing classes, have com- 
bined, and defying all competition, as well as tlie legal restric- 
tions sought to be placed upon them, are now, and for some 
time past have been charging such unjust rates for transporta- 
tion as to render the farm products of the west of little or 
no value. Com, worth from sixty to seventy cents in New York, 
is worth only from fifteen to twenty -five in Iowa — two-thirds 
of its eastern value being absorbed in charges for transporta- 
tion, storage, etc Wheat, worth from $1.50 to $2.00 in New 
York, is worth but from ninety cents to $1.25 in Iowa, the dif- 
ference being absorbed in charges for transportation, storage, 
commissions, and in passing it through elevators. It will be 



tbauhpobtattoh and jstobaob. 135 

that these monopolists who have combined for that pur- 
jpoee are systematically robbing the farmer of about one-half 
^f his crop. After he has labored diligently during the season, 
^nd harvested his crops, and prepared them for market, because 
of the privileges granted to these monopolists he must divide 
^th them, giving them one-half, or let it go to waste, and 
suffer his family to want for the necessaries of life. The 
^x)mbination against him is so perfect he is without remedy. 
-All other means of transportation have been superseded by 
Tailroads, and he is powerless to resist. The banditti who raid 
upon the country, and levy tribute upon the inhabitants by 
force, are no greater robbers or oppressors than these monopo- 
lists. Indeed, the wrongs practiced by the former are less to 
1)6 dreaded than those practiced by the latter. The people, 
4Bapported by natural and common law, as well as by statutes, 
<»n rid the country of the bandit; but the monopolist has be- 
<x>me so powerful that he defies the people, molds the statutes 
and decisions of courts to suit himself, and compels the whole 
-country to submit -to his extortions. No one would wish those 
engaged in transporting freights from the west to the east to 
lose money in the business. On the contrary, the people desire 
tliat railroad carriers should receive a fair and liberal compen- 
sation in their business, and upon the capital invested.- But 
when it costs but $30,000 per mile to construct and stock the 
railroads, and when for the purpose of illegitimate gain the 
{arsons owning and controlling theui water the stock, and add 
to the actual cost fictitious and imaginary items, that it may 
a]>peHr that these roads have cost fifty or sixty thousand dollars 
})er mile, then issue to themselves or their agents bonds to 
meet these fictitious amounts, and annually pay to themselves 
the interest on these bonds, and to increase the value of these 
inuids declare dividends upon the whole stock, it will readily 
t>e seen why the producer does complain of the high rates 
now charged for transporting his products to market. These 
companies make it impossible to do an honest business and 
show dividends, or ever pay the interest upon the bonds they 
have issued. If it be true that the charges for freights cannot 
be reduced on railroads, two things are demonstrated: First, 



186 MOHOPOLDOB AND THE FHOFLE. 

that the pablished statementB of the costs of carrying npon 
railroads are nntme; and second, that railroads have entirely 
fidled to supply«the necessities of the country. If we are to 
depend apon railroads to carry the agricultural products of the 
country to the seaboard, all hope of competing with other 
countries in European markets is at an end. If the cost of 
carrying a bushel of wheat from Iowa to New York is to remain 
as at present, one of two alternatives is presented. Either 
the producer must sell at ruinous rates, or a home market 
must be found for his crop; for the large amount charged for 
carrying it to the coast, added to the ocean freight, destroys all 
hope of a foreign market, save in times of failure of crops else- 
where. We now complain of our lack of shipping apon the 
ocean, and of the fact that the balance of trade is against us. 
With our large annual products of cereals, meats, cotton, and 
yield of precious metals, the balance of trade is in favor of 
England; and American shipping, once the equal of England's, 
is now classed with only third and fourth rate nations. One 
of the chief causes of this deplorable state of affairs is the 
absolute control obtained by these petted monopolists over our 
inland commerce, and their tyrannical extortions in rates for 
transportation. 

We have spoken of the rates of charges from the west to the 
east. We need not go into details in this matter, for every 
farmer knows from experience what proportion of his crop 
railroads demand as their share. If he does not, let him look 
at his crib of com, worth in New York from seventy-five cents 
to one dollar per bushel, and in Iowa from fifteen to twenty 
cents. Three-fourths of his crop is what these corporations, 
the^e great blessings to the country^ as they claim to be, demand 
of him for carrying his one-fourth to market, provided he will, 
at his own proper cost, load his whole crop at the place of ship- 
ment, and unload it when it reaches its destination; or, what is 
worse for him, permit it to go into the company's storehouse. 
While this state of things lasts it is not a question as to how 
much the producer is increasing in wealth, but how long will 
he be able to pay his taxes and keep his family from starving? 
If he is in debt, he is without hope of paying. No kii:^ 



TEijrSlEOBTATIOH .41!l^ WtORi^e^ ^7 

Vftperor, or despotic saltan would dare to extoi^ fifW^ tuJi wbr 
jec^ three-fourths of the productions of their toil; yet ^s 
oligarehjy composed of men who, from long practice, have 
€ome to look upon the people as their vassals, and the fruits of 
their labor as lawful spoils, demand and receive f^ their toll 
from one-half to three-fourths of the entire faxm products of 
the country. The consolidation is jiow so pertect that these 
railroad kings can dictated to the people how much diey shaU 
receive for their products, and how much i^ej must pay for 
transporting it to market. Any one of the railroad kii\gs of 
New York, by a telegraphic dispatch to the west, can d^pi^i 
the price of grain one, five, or ten cents per bupihel* The order 
is made at headquarters, and in one hour from the tim^ it is 
made the farmer in the west who is about to sell his one thou- 
sand dollars worth of wheat must take mne hundred dollars 
for it, because this railroad king has sent word west that he 
must have another one hundred dollars added to the already 
eoormous charges for transportation. Unless this combination 
oan be broken up and destroyed, and they who owu, manage, 
and control the carrying trade of the country forced to act 
honestly, there is no prosperous future for the laboring and 
producing portion of the people; they must remain bond- 
servants and vassals of tliis railroad oligarchy now controlling 
the country. 

Another evil resulting from this railroad system, directly • 
affecting the producer, is the elevator and warehouse system, 
put in operation, supported by, and prosecuted in the interest 
of this monopoly. As a necessity in shipping and handling 
grain and other farm products, there must be at shipping 
points, as well as at the great grain depots, warehouses, store- 
houses, and elevators. If these were owned and controlled by 
individuals, unrestricted by railroad companies, they would be 
of great benefit to the producer; but such is not the imt. Qo 
to any way station on the roads, or to any\)f the more prcnni- 
nent points, as well as to the great grain depots, and you will 
find an arbitrary and oppressive rule adopted, which demands 
of the producer a further dividend from his products. At 
unimportant poiuts and way-stations, the warehouaei and 



188 MONOPOLIEB AND THB FBOPLB. 

elevators are built upon the company's depot grounds, and, 
if not owned by the company, are built under an agreement 
that there shall be a division of the receipts; and in order to 
make it mutual, the elevator company, or warehouseman, is to 
charge certain rates on all grain passing through their hands; 
and the railroad company is to receive on board their cars no 
grain that has not paid its duty to the elevator or storehouse. 
Whether it is stored or not, whether it passes through the 
elevator or not, this arbitrary toll or levy must be paid before 
it can be shipped. If the farmer deliver it directly on board 
the cars of the company, he must pay these charges the same 
as though he had delivered it to the warehouseman. He can- 
not avoid this' extortion, for the only possible way he has to 
get his grain to market is to ship it over the road, and this 
he cannot do unless be pays this charge. But by far the 
greatest imposition is practiced at the great grain depots at 
Chicago, New York, and other cities. The immense daily 
receipts at these great depots demand immense warehouse and 
elevator facilities. Large numbers of elevators and warehouses 
were provided and used — formerly by individuals; and while 
warehousemen dealt individually with the public, there was 
but little abuse; competition was suflScient to insure reasonable 
charges. The owner of grain, upon its arrival at its destina- 
tion, could avail himself of any competition among ware- 
• housemen, and select such as his judgment approved or his 
interest prompted. 

But a different rule now obtains. The railroads do not stop 
half way. Their combination for carrying the product of the 
country is perfect; but another combination will afford them 
an opportunity for extorting from the producer an additional 
portion of his crop in the shape of storage. To effect this 
object, the different warehouse companies in the principal 
grain marts have consolidated or " pooled " all their interests, 
and in combination 'with the railroad companies have pursued 
and are pursuing, a course of extortion which is oppressive 
upon the producer. When his grain reaches its destination, 
it must go into a warehouse; he is in a worse situation now 
fhan when he shipped it; then he had the option to keep it or 



TftANSPOBTATION AND 6T0BAOB. 189 

sabmit to the first levy in favor of the warehonseman; bnt he 
IB now entirely helpless in the hands of the ring formed to rob 
him. Without asking his consent, his grain is taken to snch 
warehonse as the railroad agent directs; it is seized by the 
warehousemen and stored at such ruinous rates as to compel 
him to sell at once, or have the small portion of the crop which 
he sowed and harvested, and which thus far the railroad com- 
bination has graciously allowed him to retain, absorbed by 
elevator and warehouse charges. * He is obliged to use all these 
agencies or let the crop go to waste on his hands; and these 
agencies are all owned and controlled by this vast, this gigantic 
corporate power, created, enriched, and protected by state and 
national legislation, and constantly guarded by the decisions 
of the courts, state and national. Indeed, the old despotic 
maxim, '^ The king can do no wrong," that his acts cannot be 
questioned, seems to have descended to these monopolies. 
They are protected by government, and, as the case now standSi 
their servants, the people, must J)e content, because all hope 
of relief from efficient action on the part of either the legisla- 
tive or judicial departments of the government is denied them. 



- y 



CHAPTER XV. 

▲ HSVr Aim FALSE FRINGIIFLE IN HTDBAULIC8 — WATERED BTOOK — 

nS "UNLAWFUL FBOFTTS THE SOURCE OF EXTORTIONATE 

TARIFFS THE "FAST DISPATCH" SWINDLE. 

WE have attempted to show some of the oppressions of 
the present railroad system upon the agricultural 
interests of the country, and, at the close of our last chapter, 
were treating of freights, warehouse charges, etc. Closely 
connected with these latter charges is another abusive and 
fraudulent practice, which threatens not only to still further 
oppress the people, but also to more closely combine the power 
now so rapidly and surely destroying our republic. I refer to 
what is known as "Dispatch Companies." To fully under- 
stand the object and eflfect of these companies, it will be 
necessary to look a little further into the management of rail- 
roads, and the method adopted in their balance sheets for 
showing the cost of their construction, the amounts of paid-up 
capital, and their total indebtedness.* These balance sheets do 
not present the truth in any instance, and have not that pur- 
pose, being only an exhibit that will apparently justify the 
many extortions and deceptions practiced by tliese c*orpora- 
tions. The actual cost of constructing and stocking the roads 
is not given; instead we have the cost as represented by the 
stock and bonds issued and watered. For a clear understand- 
ing of tliis book-keeping, let us examine the cost of some of 
the roads as the same is given to the public, and compare it 
with the actual cost as shown by other evidence. The " Cen- 
tral Pacific" will do for one illustration. 

The Central Pacific is eight hundred and eighty-one miles 
in length. The cost of the road as given is $120,432,717, or 
$186,700 per mile. The actual cost per mile, taking the whole 
length of the road into consideration^ was less than one>half the 

a40) 



Waubbed BiodK. 141 

WiM&t reported. This information we get throngh retiable 
channels, and is andoubtedly correct. The evidence indnoM 
the belief that the cost was less than $50,000 per mile, and less 
that $60,000,000 for the whole road. The company report a 
capital stock of $54,283,190, and a funded debt of $82,d08,O00. 
Thej also report the liabilities of the road at $136,491,190, 
being more than $80,000,000 above the actnal cost, and 
$16,000,000 more than the reported cost. The stodc of tius 
company was watered to so great an extent, that to pay the 
interest on the funded debt, and declare a dividend on the 
stock, and pay operating expenses, and other contingencies, the 
road most earn at least fifty per cent, per annum. Or to put 
in plain language, the company must defraud the public in 
unjust and extortionate charges. 

The ^ Sioux City & Pacific " is the pet road of MassachusettB 
and Iowa congressmen. The cost of this road per mile, as 
shown by the report of the company, is $34,547. This cost is 
represented by paid-up capital — $2,067,600, and first mortgage 
bonds — $1,629,000. The road is one hundred and seven miles 
long. The actual cost of this road was less than $30,000 per 
mile. This company received $16,000 per mile, government 
subsidy bonds, amounting in the aggregate to $1,712,000, 
which does not appear in the report. Aside from these gov- 
ernment bonds, the reported cost of the road shows that the 
stock has been watered. 

The Chicago, Bock Island & Pacific railroad company has, 
from Chicago to Davenport, one hundred and eighty-four miles 
of road, and in Iowa three hundred and sixty miles, making 
five hundred and forty-four miles in all. The total cost as 
reported is $28,496,999, or the sum of $52,384 per mile. The 
actual cost of the Illinois portion, as shown from o£Scial 
reports, did not amount to $30,000 per mile, and the Iowa 
extension cost still less, but including the bridge at Davenport^ 
the cost will approximate to $30,000 per mile, making the 
total actual cost $15,320,000, showing that the stock of this 
road has been watered to the amount of $18,000,000. The 
Iowa portion of this road received a grant of five hundred and 
fift^ thousand acres of land, and aid by county aaid citv sub- 



148 MONOFOLIBB AND THE FBOFLB. 

scriptionB amonntiiig at least to $500,000, that do not appear 
in the published statement. 

The Iowa Falls & Sioux City road is under the special care 
of congressmen. It has one hundred and eighty-four miles 
of road but no rolling stock. The total cost as given is 
$7,685,000, or $41,222 per mile, while the actual cost was about 
$31,000. The stock was watered to the amount of $1,800,000, 
and this, too, after having received a grant of land to the 
amount of one million two hundred and twenty-six thousand 
four hundred and six acres. 

We might continue this list, but think we have referred to a 
sufficient number for our purpose. It will be seen, and is now 
pretty well understood, that the cost of railroads as reported 
by the companies, is not their actual cost, but includes large 
amounts that are pure fictions — an increase of the capital 
stock, no part of which is used or needed in the construction 
of the road, stock that is not even paid up, but is distributed 
among stochholders in proportion to the amount oi bona fide 
stock each one holds in the company. The capital stock of the 
company, and bonds issued by it, are supposed to represent the 
cost of the company's road, rolling stock, etc. But few roads 
in this country fail to earn large dividends on this actual cost, 
and but for the custom of watering stock, would show fair 
profits after running expenses, repairs, etc., are paid. If these 
corporations were prohibited by statute from increasing their 
capital stock above the actual cost of their roads, less money 
would be required for transportation of freights, and there 
would be no need of resorting to dispatch companies, or any 
other ring combinations for the purpose of extorting unjust 
amounts for transportation. But these combinations do not 
construct roads simply for the purpose of operating them; 
this is but a secondary consideration. The main object is to 
speculate in stock and bonds. 

Wall street being the grand center for this kind oif specula- 
tion, the company, in order to profit by sale of its bonds, must 
make a showing in this grand mart of receipts sufficient to 
command public attention, the rule being that stocks and 
bonds appreciate in value in market in proportion to the divi- 



WATERED 8T00K. 148 

dendfl declared upon their earnings. They who control these 
roads have two objects in view: first, to add to their capital 
stock; and second, to make dividends upon such increase of 
stock. K a line of road cost $2,000,000, and the company 
owning it can by any means make it pay dividends on three 
or four millions, they can issue to themselves stock represent- 
ing this increase. Having thus increased their stock, under 
the pretense that they wish to construct more road, or improve 
or repair what they already have, they issue their bonds to the 
amount of the increased stock, (sometimes to an amount equal 
to more than their entire capital,) and put them upon the 
market. The first object is to get dividends upon whatever 
stock they have paid up, (if any is paid up,) and next to make 
their roads earn enough to pay the interest on their bonds, 
and then, if possible, to force the earnings of their roads to a 
point where dividends can be paid on the increase of stock. 
Having increased their capital stock, and issued and sold their 
bonds, they are in no haste to add to, or improve or repair, 
their roads; for they have already consummated the object in 
view, to-wit: made in cash the market value of their bonds. 
This same* operation is repeated as often as their capital stock 
will bear reducing, and in some instances it has been repeated 
until the stocks and bonds became almost worthless. This 
species of speculation does not add one dollar to the wealth of 
the country, nor aid commerce. It only enriches that class of 
speculators who prey upon the public. 

We have shown that one and one-fourth cents per mile per 
ton will compensate for transporting freights over railroads, 
provided the business is conducted fairly and honestly, and we 
can now begin to understand why such enormous rates are 
charged. The roads must earn enough to pay the interest 
upon all the bonds sold and upon the capital stock issued by 
these companies. Tlie people, the producers, are taxed for 
this purpose. One-half of the products of every farm in the 
west goes into the pockets of these Wall street speculators, 
and the rates for transportation are increased in the same pro- 
portion that these stocks and bonds are increased. When 
more money is demanded in Wall street, tcl^rams are sent 



144 uosovouM Aim t^ft Ipeoplb. 

thionghont ihd oonntry bj ih^Sie ndboad IdtigB to their $i^rM 
laid employee to advance the rates on transp^ortatioti. Tidk 
rednoe^ the price of the farm prodnctB, and pnts the earnings 
of the ftrmer into the pockets of the railroad monopolist, and 
the stock and bond gambler in Wall street 

It would look as though the combinations of this oligarchy 
weipe perfect; that the system of extorting from the people 
and robbing the producers could not be improved, and that 
these most unscrupulous oppressors ought to bc' satisfied. 
Such is not the case. Either because they wish to have fewer 
numbers with whom to divide the spoils, or because they have 
reduced the value of their stocks and bonds until it is neces- 
sary that their roads pass under other management, gr because 
they must have still higher rates for transportation, of late a 
new combination for transportation has been formed, called 
Dispatch agencies or companies — a kind of " Credit Mobilier ^' 
arrangement. These dispatch companies are comparatively 
new in the west, and we know but little of their organization 
save that it costs still more to ship with them than with rail- 
road companies. These dispatch agencies are not formed to 
compete with railroad companies in the transportation of 
freights, nor are they in any measure rivals or opponents of 
railroad companies. In the nature of things there must be 
perfect accord between these two corporations, for the railroad 
companies could and would at once destroy the dispatch busi- 
ness if the same in any manner conflicted with the interests 
of railroad managers. TJie dispatch companies depend entirely 
upon the railroad companies for cars, locomotives, and rail- 
roads for carrying their freight. Enough is known of railroad 
management to satisfy the most skeptical that the organization 
of dispatch companies is for purposes other than the more 
expeditious transportation of freight. These dispatch compa- 
nies are composed mainly of railroad directors and superin- 
endcnts, with a few figure heads to represent the outside 
V, orld. After the formation of the dispatch companies, con- 
tracts for the use of cars, locomotives and roads are made upon 
the same principle and for the same obiect as in the case of 
the Union Pacific railroad company and the Credit MobiHeir 



(^Mnpdiiy. Thfe diteetors of the railway cethjmny, r^tiesenti^ 
Art compaAy, contract with themselved las a dispatch 6ompaiiy, 
to ftnpply themselves cars, locomotives, and roads for thd 
prosecution of the btsiness of the dispatch company, and fot 
a certain consideration agree to pay themselves, as directed 
of the railway company, for what is so leased to themselves 3u 
a dispatch company; and then, in order to promote the bmii- 
ness interests of the dispatch company, and secure to them- 
selves as its directors higher rates for transportation of freight, 
they make it a point at all times to give the preference to the 
said dispatch company. As a result of this arrangement the 
dispatch companies monopolize the principal part of the busi- 
ness. They are in appearance opposition lines to the roads on 
whose traces they are carried, and are really so, when the 
interest of the railroad stockholders not concerned in the dis- 
patch companies are considered. These stockholders get their 
dividends upon their capital stock and their share of " watered 
stock " and bonds, but do not participate in the profits of the 
dispatch business. 

Like the Credit Mobilier, it pays large dividends which it 
extorts from the people, charging even higher rates than the 
railroad companies; but it only divides among its members, 
and not with the stockholders of the railroad company, whose 
track it uses. The interest of these stockholders is not consid- 
ered. They have built and equipped the road, and selected 
their directors and managers; but these managers and directors 
turn tlie road over to a hostile company, composed of them- 
selves and select friends. To promote the business of the dis- 
patch companies, their trains are transported from one end of 
the railroad to the other in less than half the time required to 
transport a train of freight cars belonging to the road. The 
effect of this course of procedure is obvious. Shippers, finding 
that these railroad managers discriminate against the cars 
belonging to the road proper, and that they grant extraordinary 
favors and facilities to the opposition lines, quit patronizing 
the former, and do business with the dispatch companies. The 
result is that the dispatch companies now control the freight 
business, and the railroads have, as a role, quit providing 
10 



146 ICONOFQLIIS AND THB FBOFLB. 

themseiyes with freight cars. • When applied to for cars, the 
answer is, " We have none," while at the same time the side 
tracks are filled with freight cars belonging to these dispatch 
companies, demanding much higher rates than the regular 
charges. At the first glance we fail to understand why a course 
so suicidal to the best interests of the railroad company is 
pursued by its directors and managers, nor can we readily 
comprehend why they permit these dispatch companies to 
monopolize their tracks and destroy the business of their roads. 
We think we can solve the problem. These managers of the 
railroads, and such stockholders as are admitted to a participa- 
tion in the conspiracy, are the proprietors and incorporators of 
the dispatch companies. After payment of the running and 
other expenses of the road, and their own salaries (fixed by 
themselves) the dividends on their railroad stock is smalL 
Their position as stockholders in both the railroad and dispatch 
companies is the same as was that of the stockholders of the 
Pacific railroad companies and the Credit Mobilier, who could 
well afibrd to sacrifice the interests of the road and its stock- 
holders who had no interest in the Credit Mobilier, provided 
they received large dividends from their Credit Mobilier stock. 
So, in organizing the dispatch companies and giving them the 
preference over the roads, with the absolute control of the 
freighting business, while the railroad stocks pay no dividends 
and depreciate in value, and the roads and rolling stock are 
being worn out, the dispatch business thrives and pays large 
dividends to this inside ring — comparatively small in num- 
bers — which controls the road, and in addition to preying 
upon the public, so arrange the business as to exclude the 
stockholders of the road from any share in the profits of the 
dispatch company. Having oppressed the public by extortion- 
ate charges for transportation, increased the stock of the railroad 
company to an amount that precludes profitable dividends, 
even from the highest of tariffs, and issued and sold bonds of 
the company to so large an extent as to make it impossible 
to pay the interest on them, and at the same time meet the 
running expenses of the road, including their own salaries 
as oflicers and managers, having, in short, loaded the railroad 



WATERED 8T00K. 147 

oompanies with burdens greater than they can brar, as a last 
master-stroke of financiering they organize themselves into 
dispatch companies, and while they enrich themselves they 
rednce the railroad companies in which they are managing 
directors to absolute bankruptcy. The stockholders who, con- 
fiding in the integrity of these men, elected them directors 
and managers, are swindled out of their legitimate dividendSi 
their stock becomes worthless, debts accumulate against the 
company, locomotives, tracks, and cars are worn out in trans- 
porting freights for the dispatch company, at rates ruinous to 
the railroad company, and as a grand j^t^Z^ the road passes into 
the hands of these conspirators under the orders or judgments 
of courts. In the meantime shippers are compelled to pay 
double prices for freights because the railroad companies have 
not the necessary facilities for shipping; all has passed into 
the hands and under the control of the dispatch companies. 
By a mere fiction, the managers of the road contracting with 
themselves as dispatch companies, a competition is permitted 
to take the control of the carrying trade over the road, control 
the track and rolling stock, as well as the oflicers of the railroad 
company, destroy their business, and drive them into bank- 
ruptcy. Those not in the secret of the orgrnization fail to com- 
prehend its necessity. Why, for example, a train of cars run 
in the interest of the dispatch companies can travel at double 
the rate of speed of the trains run in the interest of the rail- 
road company, or why higher rates of transportation should 
be taxed and paid. The only solution we can give is that it 
presents additional means for taking from the producer an addi- 
tional portion of his product in the shape of charges supposed 
to be paid to a company organized for the purpose of aiding 
in the transportation of freights, but which is, as a matter of 
fact, a combination in the interest of the managers of the road 
with the real purpose of making personal gain to themselves 
at the sacrifice of the interests of the stockholders. 

As a result of this new mode of conducting business, let us 
see how the price of freights is aflfected. During the summer 
and fall of 1872 the price of freights by water from Chicago to 
New York was $4.25 per ton, and by railroad from $7.00 to 



i4B M0190F0LDBI Aim THJB FBOFLE. 

98.00. With the close of navigation the rates, nnder the man- 
agement of the dispatch companies, advanced to from $26.00 
to $28.00 per ton. While the railroad companies can carry for 
$7.00, the dispatch companies charge $25.00. The margin for 
profit on the stock of these dispatch companies promises to 
Bqnal the dividends of the Credit Mobilier stock, and from this 
dhdofwing we can have some idea of the robbery being practiced 
npon the people — ^particularly the formers. Well may the 
producers of the west complain of these swindling monopolies, 
and band together for mutual protection. 



OHAPTEB XVI. 

A. FBXVILB9ED OLAfiB— -THE M0N0PQLIBI8 SXLIXySD OF THX BCTDBHt 
or TAXATION — AS OUTBAQK UPON BEFUBUOAN QOVSfUQfBirr. 

ANOTHEB evil resulting from the railroad ajstem of thd 
conntiy is the partiality shown railroad companies in the 
matter of taxation. The constitutions of all the states provide 
that the levy of taxes shall be uniform; and in contemplation 
of law each owner of property subject to taxation must bear a 
proportionate share ot the taxes levied for the support of the 
government. Indeed, it is a part of the compact entered into 
among all civilized people, that each will contribute a propor- 
tionate share towards defraying the expenses of the government 
under which he lives, and which affords him protection, and 
secures to him the enjoyment of his rights as a citizen. In a 
republic where all have, or are supposed to have, equal rigbta, 
this contribution to the support of the government is a duty 
weighing upon all, and to make a discrimination in favor of 
any man or class of men, or of any companies or corporations, 
contradicts the fundamental principles of republican govern- 
ment, and recognizes favored or privileged classes. To compel 
the property of individuals to alone bear the burdens which 
should be shared by that of corporations violates both the 
letter and the spirit of the constitution. All public burdens 
should bear equally upon all people, associations, and corpora- 
tions. The legislature has as much right to say that the 
property of one-half of the citizens of a state shall pay the 
entire expenses of the government, while no taxes shall be 
imposed upon the property of the other half; or to provide tliat 
they who engage in particular branches of business shall supply 
all the means for defraying the expenses of the government, 
as to provide for the partial or total exemption from taxation 
of the property of corporations. Yet as a matter-of-fact railroad 



150 ICOXrOFOLIES ABD THE FEOPUL 

corporations are not required to pay their proportionate share 
of taxes, nor is their property subjected to the same rules of 
taxation as that of individuals. In almost all the states these 
corporations are taxed upon their earnings; their own oflScers 
keep the books, and once in each year make a showing, and 
upon this showing a small tax is levied. If they are honest 
and present a correct statement of the earnings of their road, 
the amount of tax fixed by the legislature of the state is paid; 
but if they choose to suppress the truth a less amount must 
suffice. Take the state of Iowa as an illustration. Prior to 
1872 railroad property in this state did not pay more than one- 
seventh as much tax upon its value as the property of indi- 
viduals, and under the present law it does not pay more than 
one-half as much. Yet no property in the state has yielded 
such large profits on actual cost and value as railroad property. 
Iowa had in 1872, subject to taxation, 3,160 miles of railroad. 
Take the value of their roads as fixed by the companies and 
reported in the Railroad Manual^ and the average per mile 
is over, rather than under, $40,000. Then for the pupose of 
taxation 'reduce the valuation to about same rates as are fixed 
upon the property of individuals, and the average would be 
about $18,000 per mile. This would make the grand aggre- 
gate for tax purposes $56,000,000. Now if a two per cent, tax 
(which is less than the average rate for all purposes) was 
assessed upon this property, the revenue to the state and 
counties would amount to the sum of $1,120,000. But if the 
same rule of taxation were applied alike to all property in the 
state the rate demanded of individuals would be less than at 
present, while railroad companies would only be required to do 
what the constitution exacts of them, to-wit: pay their just 
proportion of taxes for the support of state government. Is it 
any wonder that we complain of high rates of taxes when so 
large a portion of the property in the state is exempt from 
taxation ? In Muscatine county there is at present about 
eighty-five miles of railroad. At an assessed value of $18,000 
per mile the total for taxation would be $1,530,000, which, on 
a two per cent tax would afford a revenue of $30,600, of which, 
if divided between the state and county as other taxes are 



▲ FBIVILBOED CILA£B. 161 

divided, there wonld be paid into the county treasury about 
$24,500, which would be a large increase over the amount now 
paid to the county. The same would be the result in all the 
other counties in the state where the manner of taxing rail- 
roads so changed as to make no discrimination in their favor. 
The same kind of discrimination is made in most of the states 
in favor of the railroads and against the people. No good 
reason has ever been given for this kind of discrimination, nor 
can it be supported or justified upon principle or upon consti- 
tutional grounds. The value of a mile of railroad can be as 
easily ascertained as that of an acre of ground, or of a house 
and lot The depot, and station grounds and buildings can be 
assessed as readily as any grounds or buildings. The value of 
their rolling stock is always included by the companies in 
giving the cost of their roads, and the value of the roads, 
including rolling stock, can be more easily ascertained by the 
assessor than the value of many kinds of personal property, 
yet it has never been considered necessary or permissible under 
the constitution to discriminate in favor of individuals or 
classes of individuals when assessing property for the purposes 
of taxation. But when the property of these gigantic corpora- 
tions is to be taxed, when they are called upon for their share 
of taxes to aid in defraying the expenses of the governments that 
are granting them extraordinary and exclusive privileges, they 
refuse to submit to the law which prescribes the manner of 
collecting taxes from the people and ask special legislative 
enactments in their favor. To secure such enactments they use 
their great influence in filling the legislative halls with their 
stockholders, directors, and attorneys. Tlius far they have 
generally succeeded, and in most of the states special statutes, 
discriminating in their favor, are now in force. Because of 
this special legislation the people are paying taxes that should 
be paid by railroad companies, and in return for favors shown, 
these companies are constantly increasing their extortions, and 
imposing additional burdens upon the people. 

We can more fully realize the extent of the unjust burdens 
imposed upon the people by ascertaining the amount of capital 
invested in railroads in the United States, and showing its 



VM HOENOPaUEB AJSrO THB FBOFLB. 

relative valne compared with the taxable property of the 
oonntry. For this purpose it will not be unfair to take the 
value of railroad property as given by the different companies 
and published in the JSailToad Marmal. The reported cost 
of all but forty-six roads in the United States is $2,070,980,286. 
If we add to this amount the probable cost of those not 
reported, among which is the Union Pacific, this large sam 
will be swollen to nearly $3,000,000,000. The taxable property 
in the United States, reported in the census of 1870, was 
$14,178,986,732. If this railroad property was included, these 
corporations should pay about one-fifth of all the taxes col- 
lected in the country. The method of taxing railroad property 
that has always obtained in Iowa, and some of the other states, 
relieves it of at least three-fourths of the taxes justly due from 
it, and requires the people to supply the deficiency created by 
this exemption. But, as will appear from the census returns, 
a small portion only of the vast railroad wealth of the country 
is included in the valuation of property returned; nor is it 
listed and returned by local assessors as is the case with the 
property of individuals. In Iowa the census returns show the 
value of the property in the state to be $302,515,418. The 
value of railroads in Iowa, as shown by the different companies 
is $84,067,663. An equal assessment and levy of taxes upon 
all the property in the state subject to taxation would require 
this railroad property to pay over one-fourth of all the taxes 
levied in the state; yet as a matter of fact not one- twentieth 
of this amoxmt has ever been collected, unless we except the 
year 1872, when a small increase over old rates was required. 
While all acknowledge the injustice of this system of discrim- 
ination in favor of railroad companies, and while the people 
are burdened with more than their just proportion of taxes, 
all efforts to correct the evil seem to have proved abortive. 
The fact that more than eighty-four millions of dollars, being 
over one-fourth of the entire wealth of the state, is held and 
controlled by corporations, possessing under their charters 
special privileges, who have combined to prevent legislation 
that would require of them a contribution of their just share 
for the aopport of the govemmeot, explains the reaaona fbr 



A PBIYILBOED CLABL 158 

these dJBcrifninatioiifl in the collection of tdxen. The [Kiwer 
<tf thiB railroad oligarchy is now so great that it f hapes and 
controlB all revenae statutes. In all cases where the interests 
of the people and those of these corporations conflict, the cor- 
porations acting in concert, are triumphant, and the interests 
of the people are disregarded. Tuxes justlj doe from the 
corporations, by special legislatiuu.» are extorted from t}if 
people, b^nse this anti-republican combination, controlling 
the wealth of the country, demands it. 



CHAPTER XVII. 

STBONO ORASP OF OONSOUDATED OAFTTAL ON AMSBIGAH LIO- 
IBLATION — BKBOHKR ON ^^ REFORMATION OR RKVOLllHON " 

." 1 



HOWEVER much we may boast of our purity, patriotism, 
and political integrity, the history of the legislation of 
the United States, both' state and national, proves that legisla- 
tors, like other men, are subject to temptation, and that they 
do not always successfully resist the tempter. It is not a 
pleasant truth to acknowledge, that the acquisition of money is 
the controlling motive in the American mind; yet it is a truth. 
Nor is it pleasing to admit that corporations control the legis- 
lation of our nation and state; but the fact is too patent to be 
denied. Nor will any one who, without prejudice, examines 
the history of l^slation upon the subject of railroads, deny 
that legislators have been controlled in their acts by the desire, 
and from the prospect of receiving personal pecuniary benefit 
by the passage of acts granting special favors to railroad com- 
panies. If the instances of corrupt legislation were rare, or if 
the persons who acted from personal considerations, rather than 
for the public good, were few in number, we would not feel jus- 
tified in devoting time to the discussion of the subject But 
when this species of legislation becomes the rule, and legisla- 
tion in favor of the people the exception, as has been the case 
for years past, we feel fully justified in calling the reader's 
attention to the matter. 

If we were asked what acts passed by the forty-second con- 
gress were of benefit to the people, we would be expected to 
answer that the internal revenue and tariff laws had been mod- 
ified, and a part of their burdens lifted from the people; but 
nothing else of benefit to the public. If, however, we were to 
look through the acts of congressy we would find almost all 

(IM) 



OBASF OF CAPITAL ON LBOTSLAITON. 165 

conceivable acts in favor of corporations, companies, and indi- 
viduals, granting special privileges, which in almost every 
instance, might be characterized a "congressional job.'' 
Patent right extensions; grants to railroad companies; for the 
sale of Indian reservations; amendments to railroad charters, 
bridge charters, and other like interests, have monopolized the 
time of the national legislature not consumed in investigatiDg 
allied irregularities of some of its members. As a rule, lob- 
byists and rings have shaped and controlled legislation for 
years, and have constituted themselves one of the established 
institutions at the national capital. The successful lobbyist 
demands and receives for his services larger pay than the salary 
of congressmen. These men never appear at Washington 
unless they have a congressional job on hand. To them the 
ear of an average congressman is always open. A measure 
without any merit, save to advance the interest of a patentee, 
or contractor, or a railroad company, will become a law, while 
measures of interest to the whole people are suffered to clum- 
ber, and die at the close of the session from sheer neglect. It 
is known to congressmen that these lobbyists are paid to 
influence legislation by the parties interested, and that dis- 
honest and corrupt means are resorted to for the accomplish- 
ment of the object they have undertaken; that they are a 
species of brokers whose business it is to beg and buy con- 
gressional votes for some pet scheme; to do acts which in 
former times would have disgraced all parties concerned, but 
who are now looked upon as a necessary part of the legislative 
machinery. Ot* course those interests that can employ the 
greatest number of these congressional brokersj and wield the 
greatest influence throughout the country, are in the best shape 
to secure £Eivorable legislation. No one interest in the country, 
nor all other interests combined, are as powerful as the railroad 
interest Eailroad corporations, by constantly asking and 
receiving, have acquired such strength as to control legislation 
in all cases where their interests are affected. With a net-work 
of roads throughout the country; with a large capital at com- . 
mand; with an organization perfect in all its parts; controlled 
by a fisw leading spirits like Scott, Yanderbilt, Jay Gk>uld, 



156 MOWOPOLIEfi AXD THE PEOPLE. 

Traoj) and a dozen others, the whole strength and wealth of 
this corporate power can be put into operation at any moment, 
and congressmen are bought and sold by it like any article of 
merchandise. 

We have already shown the value of the railroad property 
in the United States, and some of the practices of companies, 
and their abuse of the privileges granted them. We are now 
treating of their influence upon legislators and legislation, and 
of the great power their wealth and combination secure for 
the purpose of controlling l^slation. In this connection we 
must not forget that the vast sums owed by railroad companies 
in the United States, for which their bonds have been issued 
and sold, is a powerful persuasion for legislation in 4;heir favor. 

We look upon the national debt as being enormous, and are 
apt to complain of the burdens it imposes; but great as it is, 
these railroad corporations, after showing a paid-up capital 
equal to the cost of all the roads in the country, less $865,357,- 
196, show a bonded indebtedness of $2,874,149,667, being two 
billions over and above the entire cost of all the roads in the 
United States — showing that the total amount chargeable 
against the railroads of the country, exclusive of floating debts, 
is the sum of $5,169,129,664. This vast sum, amounting to 
more than one-third in value of the entire taxable property of 
the nation, is concentrated in these corporations, whose inter 
ests are at war with the people's. Controlled as it is by a few 
leading men, who have their partners, agents, and servants 
every where, it is not strange that the champions of these 
monopolists should be found in congress. The power of this 
great monopoly is felt in the nomination and election of con- 
gressmen. One-third of the wealth of the nation combined 
under the control of a few men is a dangerous power in a 
republic. When the object sought to be accomplished by this 
power has been to take control of the government, and admin- 
iater all its departments in the interest of anti-republican 
inBtitutions, to build up monopolies and trample upon the 
rights of the people, it has had no trouble to secure the num- 
b^ of congressmen suflScient for its purposes. In proof of 
thia assertion we have only to look at the history of congres- 



OBA8P OF GAFTTAL ON LBQISLATIOK. 167 

donal l^islation upon the sabject of railroads as shown in a 
former part of this work. We cannot shut our eyes to the fiust 
that the consolidation and combination of wealth and influenee 
of railroad companies have procured the passage of acts of 
congress under, and bj means of which, these corporations 
have added largely to their wealth, and strengthened tbem- 
selves for the desperate struggle soon to come between them 
and the peopla Mr. Henry Ward Beecher has had his atten- 
tion drawn to^ some of the more alaro^ing phases of our present 
political condition. In a recent address delivered in St. Louis 
he used the following language : 

^^ I must, however, make haste to say that among the dangers 
of the times is one which has developed out of the prodigious 
rapidity of the accumulation of enormous and consolidated 
wealth. If I stand in the city of New York and look south- 
ward, I see a railroad — the Pennsylvania Central — that runs 
across the continent with all its connections. Its leases and 
branches represent a capital of some hundreds of millions of 
dollars. If I turn my eyes to the north, I see the Erie, 
where many hundreds of millions dollars lie. If still further 
to the north, I see the great New York Central, that represents 
hundreds of millions of dollars. These three roads represent 
thousands of millions of consolidated capital. Now suppose — 
in any emergency the railroad interest demands — suppose 
there were some great national question which demanded that 
the president of the United States should be a man, and the 
senate should be composed of men playing into the hands of 
the great national railroads' concentrated capitalists, what 
power is there (m the continent tliat could for a moment resist 
them? It is not a great many years since it would seem almost 
atrocious to have suggested that thought. But legislatures 
have been bought and sold, nn til we think no more about it 
than of selling so many sheep and cattle. Does any body sup- 
pose that if it were a national interest that these vast cor- 
porations were seeking to subserve, that there is any legislature 
on this continent that could not be crushed or bought out by 
this despot, compared with which even slavery itself were a 
small danger. One of the greatest humiliations of a nation 



158 MONOPOUKS AND THE PEOPLE. 

that ie justly proud of so many things is that disaster whic't 
has fallen upon our congress. When we see the slimy track of 
the monster, we may justly ask: 'What are we coming to?' 
There has got to be a public sentiment created on this subject, 
or we will be swept away by a common ruin. I tell you that 
the shadow that is already cast upon the land is prodigious. 
I do not believe in the scociologists, in the intemationid, nor 
the communists, but when I see what rich men, as classes, are 
doing with our legislatures, what laws they have passed, what 
disregard there is to the great common interest, I fear that the 
time will come when the workingmen will rise up and say 
that they have no appeal to the courts, no appeal to the legis- 
latures — that they are bought and owned by consolidated capi- 
tal — and when that time comes, unless it brings reformation, 
it will bring revolution. And if any such time does come, I 
do not hesitate to say I will stand by the common people for 
the encouragement of the working people, and against the 
wealth of the consolidated capital of the land." 

This great consolidated railroad interest now has its cham- 
pions in the halls of congress. In the senate is Dorsey, presi- 
dent of the Arkansas Central railroad. Patterson, senator- 
elect from South Carolina, is a railroad man. Jones, of Ne- 
vada, Allison, of Iowa, Mitchell, of Oregon, Carpenter, of 
Wisconsin, and Windom, of Minnesota, and others are recog- 
nized as reliable railroad men. In the house we have Brooks, 
Kelly, Schofield, and many more who have proved their fealty 
to this great monopoly on many occasions. In addition to the 
friends of these corporations in the legislative halls, paid lob- 
byists throng the capital, supplied with stocks and money, to 
be used " where it will do the most good." This money is 
supplied by the railroad companies for purchasing votes for 
favorite measures, and the recent startling developments show 
that this fund does not lie idle. All this has resulted in cor- 
rupt legislation. Congressmen have aided in procuring grants 
and special privileges to companies of which they are members, 
and other congressmen have listened to the arguments of lob- 
byists, and sacrificed the best interests of the people to promote 
the interests of these monopolies. 



QRASP OF OAFTTAL ON LBQI8LATI0N. 159 

Hie influenoe of railroad companies over legislation is not 
oonfined to the general government. It develops its fnll 
strength in state legislatures. There it manifests itself openly. . 
Bailroad companies nominate and elect their own men for the 
avowed pnrpose of secnring the enactment of laws favorable 
to themselves. Bailroad directors, stockholders, and attorneys 
are elected to the legislature because their interests are adverse 
to those of the people; they are selected to defeat all legislation 
tending to protect or relieve the people from the oppression 
of these corporations. Paid lobbyists are kept in attendance 
during the legislative session for the same purpose. Free 
passes are given to legislators as cheap bribes, and money and 
railroad stock and bonds are placed '^ where they will do the 
most good *' to the railroad interest. By the use of all these 
means, majorities in the interest of railroad companies are 
secured, or such strong minorities as wiU prevent unfHendly 
legislation. As a fact, now a part of the history of the country, 
the legislatures of many of the states are in the interest of, 
and controlled by, these corporations. They shape all public 
legislation, and rule the affairs of the state. The people are 
taxed and robbed by their own legislatures. Immense sums 
of money, or state bonds, are donated to these corporations, 
and the people are taxed to pay them, while the railroad prop- 
erty is practically exempt from taxation. The legislature of 
the state of Louisiana donated to a single railroad company 
$3,000,000, and guaranteed the bonds of the same company few 
about as much more. The legislature of the state of Alabama 
has voted to diffci*ent railroad companies many millions of 
dollars. The same is true of Georgia, Texas, North and South 
Carolina, and many other states. In some of these states men 
who were elected to represent the people, and who were 
pledged in their interest, have openly sold themselves to this 
railroad monopoly. For a (jonsideration paid to them they 
have assisted in bankrupting their states, and reducing the 
people who trusted and honored them to a state of servitude 
scarcely less oppressive than the old system of African slavery. 
The vaJue of property is destroyed by excessive taxation, and 
the political and judicial power of the states is handed over to 



100 MONOPOLIES AND THE PEOPLE. 

railroad men, who, bj combining their interests, have created 
a great central power, antagonistic to the people and destructive 
of republican institutions. In the northern states it has been 
found irupossible to procure just legislation where the interests 
of railroads and of the people conflict. In addition to the 
license given to railroad companies, by legislative grants and 
dpedal privileges, to plunder the people, legislators, in viola- 
tion of constitutional provisions, and of every principle of 
justice, have persistently refused to require of these corpora- 
tions their just proportion of taxes, and have just as persist- 
ently provided for taxing the people to aid railroad corpora- 
tions. Take the state of Indiana as an illustration. Counties, 
cities, and towns have been burdened for years with unjust 
taxation because of legislation in favor of local aid to railroads. 
In that state there are now three thousand five hundred and 
twenty -nine miles of railroads, representing about $100,000,000. 
For the purposes of taxation all of this railroad property rep- 
resents but $10,000,000. Some of these roads for the purposes 
of taxation are appraised at $3,000 per mile, and some as low 
as $500 and $400. While the property of individuals is ap- 
praised at about one-third of its estimated value, this railroad 
property does not pay taxes upon more than one-tenth part of 
it3 estimated value, and when, at a recent session of the legis- 
lature, an effort was made to amend the statute so as to make 
taxation more equal, it was defeated by the railroad men in the 
legislature, supported as they were by the strong lobby whom 
they had paid to be in attendance. The history of railroad 
legislation in the state of Iowa is of the same glaring character. 
We have the pleasure of laying before our readers the follow- 
ing succinct history of this Iowa legislation, from the pen of 
Hon. Samuel McNutt, who, for the last ten years, has been a 
member of the legislature (six years in the house and four 
in the senate), and who kin^y furnishes this commum'cation 
at our request: 

HT8T0EY OF RAILWAY LBOISLATION IN IOWA. 

Hon. D. C. Cloud, Muscatine, Iowa: 
Dkab Sik: The progress of the railroad question is remarks- 



GRASP OF CAPITAL ON LEGISLATION. 161 

ble in onr own state. As a member of the Iowa legislatme 
for -ten consecutive years, I have had occasion to note that 
progress, and to observe the advancement of that interest from 
straggling infancy to vigorous growth — from feebleness to a 
strength that is fearful to contemplate. 

The people of Iowa, through their legislature, have always 
been eminently friendly to the construction of railroads and 
the promotion of the railway interests. In proof of this, 
witness the whole history of our legislation; witness our mag- 
nificent land grants, subsidies, bonds, subscriptions, and taxes, 
to the amount of five per cent, of our entire valuation, in one 
year, as free gifts to railroad corporations. And yet some of these 
corporations have cheated us as people never were cheated 
before. We have afforded immunities to capital invested in 
railroads that are not afforded to any other kind of capital in 
the state. Witness the hitherto almost entire exemption from 
taxation of that kind of property. But, more than this, we 
have laws regulating the charges to be made by those engaged 
in several of the industrial pursuits, while up to the present 
time there has been no law upon our statute books interfering 
with the charges made by railroad corporations; and only the 
right to interfere has been claimed in cases of public necessity, 
where those corporations are guilty of gross extortion or unjust 
discrimination. 

The first grant of lands to aid in the construction of rail- 
roads in our state is known as the '* Iowa Land Bill," which 
passed congress and was approved by the president, May 15th, 
1856. Under this act there has been certified to the state, to 
aid the four original land ^rant roads, as follows: to the 
Burlington & Missouri river railroad, two hundred and eighty- 
seven thousand acres ; to the Mississippi & Missouri (now part 
of the Chicago, Rock Island & Pacific) railroad, four hundred 
and seventy-four thousand six hundred and seventy-five acres; 
to the Iowa Central (afterwards the Cedar Rapids & Missouri 
River) railroad, seven hundred and seventy-five thousand and 
ninety-five acres; and, to the Dubuque & Sioux City railroad, 
one million two hundred and twenty -six thousand five hundred 
and fifty-nine acres. On the 12th of May, 1864, congress 
11 



162 MONOPOLIES AND THE PBOPLR. 

paseed an act granting lands to aid in the conBtmction of 
another railroad across the state, from the city of McOregor, 
westward, on or near the forty-third parallel, to Sioux City. 
The lands in this grant were supposed to exceed a million of 
ac^res, but were found afterwards to l)e less than half a million. 
On the 12th of July, 1862, congress authorized the diversion 
of a portion of the Des Moines Kiver Improvement Company's 
land grant to the Des Moines Valley Railroad Company, the 
amount of which I have not before me. It is safe to say that 
all these railroad land grants, taken together, amount to over 
fov/r rmlUona ofdcres^ or nearly one-eighth of the land of the 
state; or, more approximately, one dcre out of evSry eight and 
a half dcres of the entire area of Iowa has been given away to 
railroad corporations. In addition to this immense subsidy, 
the people along the several lines contributed largely toward 
their construction. 

On the 14th of July, 1856, the general assembly, in extra 
session, passed an act conveying the land of the four first 
mentioned companies, upon certain conditions. Section 14 of 
that act (which act is the original " charter " of those corpora- 
tions), now found as section 1,311 of the Revision of 1860, 
reads thus: " Said railroad companies accepting the provisions 
of this act shall at all times be subject to such rules and regu- 
lations as may, from time to time, be enacted by the general 
assembly of Iowa, not inconsistent with the provisions of this 
act, and the act of congress making the grant." 

Under this " charter " the companies went to work, and 
when some of their roads were extended toward the interior, 
complaints began to arise that the railroad tariffs were so 
arranged as to seriously discriminate against the trade and 
commerce of Iowa towns and in favor of points out of and 
beyond the state; that these tariff rates were also so arranged as 
to deprive our people of a choice of markets, rendering the 
Mississippi river useless as a highway of trade and commerce, 
and compelling our people either to pay tribute to Chicago or 
go without a market The evidence in this matter was of a 
character that could not be questioned, and although the sub- 
ject was brought before the general assembly of 1864, we 



GRASP OP CAPITAL ON LEGISLATION. 168 

refused to take any action at that time, hoping that the com- 
panies which had been so liberally dealt with by onr people 
would, upon remonstrance, deal fairly and justly by them. 

When the general assembly met again, in 1866, the matter 
of railroad discriminations against our people had assumed a 
still more momentous shape. The greater portion of our time 
during that session was occupied with that question. Weeks 
after weeks were spent mainly discussing whether or not the 
state had the right to prevent unjust discrimination or in any 
way control railroad corporations as to their charges. The then 
attorney-general (Hon. F. E. Bissell, now deceased) gave it as 
his official opinion that the state possessed no such right; but 
that in the matter of tariff charges, those corporations were 
above and beyond all l^slative control. Whether the feet 
that he was a " railroad attorney," as well as attorney-general 
for the state, had anything to do with influencing his 
" opinion,'* is not for me to say. We had able lawyers of the 
very opposite opinion, but the fact of this announcement gave 
i;;reat encouragement to the railroad party, and was calculated 
to dishearten those of us who believed that the people had some 
rights which even ci^rporatione should respect. It was now 
openly declared by eminent attorneys, both in the legislature 
and in the powerful '* lobby " that hung around us, that in the 
original '* charter," or grant, the state, while reserving the 
right t»/ ''enact rules and regulations," had either failed or 
neglected to reserve, in specific and " express terms,'''* the par- 
ticular right to regiilate and limit tariff charges, and therefore 
she could not now exercise that right, and could never regain it. 

Listening to these astounding claims, put forth by the attor- 
neys for the corporations, some of us deelared that if God and 
the good people of Iowa ever gave us a chance to reserve, in a 
railroad charter, the right of control, we would surely do it in 
such specific and " express terms " as even a railroad attorney 
eould neither mystify nor explain away. The golden opportu- 
nity to do this very thing occurred in 1868. A certain state 
of facts existed regarding the management of the Chicago, 
Rock Island & Pacific railroad company, which rendered new 
legislation necessary. The executive committee, headed by 



164 MONOPOLIE8 AND THK FBOPLK. 

John F. Tracy, had issued and put upon the New York money 
market ne&rXyfour million dollars' worth of " watered stock,'* 
and realized the (tash for it before certain other parties were 
aware of what had been done. With this money the Tracy 
jMirty claimed that they intended to build the road from Des 
Moines to Council Bluffs (the road at this time being com-. 
pleted only to Des Moines). The immediate result of this 
" stock operation '^ was 9 bitter quarrel between the Tracy and 
the anti-Tracy parties of the stockholders. The Tracy party 
were said to be in the minority, but they had the money and 
the executive committee. Suits were commenced against them 
in the New York courts to forbid their construction of the road 
west of Des Moines, and to compel them to disgorge the four 
millions of dollars for distribution among the stockholders. 
In the meantime the company had forfeited their right to the 
land grant in consequence of the non-construction of the road 
beyond Des Moines, according to the terms of the original act 
The consolidation of the Chicago, Eock Island & Pacific rail- 
road company's stock (a company organized under the laws of 
niinois) with that of the Mississippi & Missouri railroad com- 
pany (organized under the laws of Iowa), needed legislative 
sanction by the general assembly of Iowa; and further, the 
direc'tors of the consolidated company wanted not only a 
legalizing act covering the above ]K)ints, but also an extension 
of their term of office for one year beyond the time for which 
they had been elected by the stockholders. 

Under this state of things, the " Tracy party," legally repre- 
senting the consolidated company, applied to our legislature 
for relief and protection ; and, actcx)rdingly, a bill was intro- 
duced covering the desired j)oint8, and re-granting the lands to 
the company under certain conditions and restrictions, which 
when agreed to by the company, should remain forever a con- 
tract between the state and the company. 

At this juncture, one of the judges of the supreme court 
of New York issued a solemn injunction upon the general 
assembly of Iowa, forbidding that body to legislate, in any 
way, upon the matters I have alM»ve recited. Some of us, not 
having the fear of New York courts nor the majesty of Judge 



ORASF OF CAFTTAL OS LEGISLATIOK. 166 

Gaidozo before oor eyes, fairly laughed at that judicial funo- 
tionary^B lordly impudence. We thought that the grand 
opportunity had now arrived when the state could justly step 
in and pass an act compelling the company to construct the 
road, for the sake of the extraordinary relief sought, and in 
that act reserve^ in ^' express tenns,^^ as a matter of cotUract^ 
the right to control the tariff rates of at least one powerful 
corporation, connecting with the Pacific railroad at Council 
Bluffs, and thereby control the rates of other lines crossing the 
state with similar connections. This express reservation of 
right, in the form of what was known as the ^' Doud Amend- 
ment," was iniiBrted in the act in relation to the Chicago, 
Bock Island & Pacific railroad company, and will be found as 
the first proviso in the second section of that act (chapter 13, 
on page 14, Acts of Twelfth General Assembly), and is in the 
following words : ^^ Provided^ said railroad company, accept- 
ing the provisions of this act, shall at all times be subject to 
such rules and regulations, and rates for the transportation of 
freight and passengers, as may from time to time, be enacted 
by the general assembly of Iowa." 

The company, through its proper officers, accepted the terms 
of this act, and filed that acceptance in the office of the secre- 
tary of state, thus closing a contrdct between the state and 
the company, and setting at rest forever the question of con- 
trolling and regulating the charges for freight and passengers 
in favor of the state. The same proviso was afterwards 
inserted in the act in relation to the Des Moines Valley rail- 
road company (chapter 57, page 63); also in the act relating 
to the McGregor Western railroad company (chapter 58, page 
67); also, in the act relating to the Dubuque & Sioux City 
railroad company (chapter 124, page 164); all acts of the twelfth 
general assembly. 

The passage of the last named act aroused unusual commo- 
tion along the proposed railroad line from Cedar Falls, via 
Fort Dodge, to Sioux City, in consequence of the railroad 
managers declaring that not another mile of that road would 
ever be built until the pr- . iso for control should be repealed* 
Work ceased along the line; the laborers were discharged; the 



166 MONOPOLIES AND THE PEOPLE. 

people who expected a railroad through their country became 
alarmed. Meetings were held at Fort Dodge, Sioux City, and 
ther points, and extraordinary efforts were put forth to 
nduce Gh>vemor Stone to call an extra session of the legis- 
itnre for the purpose of repealing the so-called ^^ Doud 
.imendmerU.^^ A committee of prominent citizens wab 
appointed to visit, in person, the members of the general 
Msembly, and have them sign a request to the governor in 
ikvor of an extra session. This committee, knowing my 
record on this question, did not do me the honor of a personal 
nsit, but they sent me a letter (still in my possession,) to 
which I replied through the public press, strongly opposing 
their movement, and after reciting a portion of the fkcts 
herein recapitulated, earnestly requested them to let the Doud 
Amendment alone; for I believed it to be one of the wisest 
measures ever enacted by our legislature, and, having been 
one of its foremost advocates in that body, I would still 
defend it The effort to caU an extra session failed, and the 
railroad managers in the north, finding their efforts in that 
instance vain, after frightening the people nearly a year, con- 
cluded to go to work again, and so the building of that road 
TOnt on to completion. 

We had now succeeded in making the question of control a 
matter of contract between the state and the companies above 
named; so that, so far as they are concerned, no person or 
authority can question that right. Some of these roads being 
parallel lines across the state, the limitation of their charges 
will virtually control the others. 

I have always maintained that the state, by virtue of her 
sovereignty, possesses the right to regulate and limit railroad 
charges whenever the public necessity, or the public welfare 
requires such limitation, without any special reservation in 
any charter or contract. But inasmuch as eminent counsel 
denied it, I was one of the original prompters and friends of 
the " Doud Amendment." I was this for the further reason, 
also, that history teaches me that when the interpretation of 
eonstitutions or doubtful laws, in cases where the poor and 
humble were on one side and wealth and power on the other 



ORA8F OF CAl*rTAL OK LEGISLATION. 167 

8ide> that interpretation has been almost invariably on the side 
of wealth and power. 

Dnring the session of 1870, the question of regulating and 
taxing railroads came up again; bat nothing was done except 
the passage of a law authorizing the state treasurer to levy a 
tax on iheir gross receipts, as follows: On the first $3,000, or 
part thereof, per mile, one per centum; on receipts over 
$8,000, and under $6,000, two per centum ; and on the excess 
of $6,000 per mile, three per centum. An act was also passed 
(which I opposed,) authorizing townships, towns, and cities, to 
vote a tax, not exceeding five per cent, of their assessed valua- 
tion, to aid in the construction of railroads. At this session 
I succeeded in securing the passage of an act (chapter 90, 
acts of Thirteenth General Assembly,) providing that taxes 
levied by order of any court to pay judgments on county or 
dty bonded indebtedness, no penalty but legal interest shall be 
collected. 

At the session of 1872, the question of railroad tariffs, tax- 
ation, and control, came up again with increased interest. 
We passed an act (chapter 12 of public laws^) making the 
work, etc., of laborers and mechanics a lien upon the road bed, 
right of way, etc., of railroads, thus securing them in their 
pay for labor done or materials furnished. The five per cent, 
tax law was repealed, and an act (chapter 26 of public laws,) 
was passed, making the census board (now executive council.) 
a board of assessment of railroad property. Under this act a 
new plan of assessing this kind of property was adopted, and 
a much larger revenue derived therefrom than heretofore. A 
freight and passenger tariff bill (known as the O'Donnel bill,) 
passed the house but failed in the senate. Tliose of us in the 
senate who voted for the bill, were remembered by the rail- 
road managers when we met in adjourned session last winter, 
(January loth, 1873,) by leaving us out of the list of senators 
whom they favored with free passes. But they sent passes to 
all the senators who voted againH the bill. The passes from 
the Chicago, Rock Island & Pacific railroad company were 
accompanied with a private note, stating tliat free passes were 
not now given generally, " btU only t^ *^^ f '^^.^ 



168 MONOPOLIES AND THE PEOPLE. 

The adjourned session of 1873, was for the special purpose 
of considering and enacting the new code which the three 
commissioners had now spent nearly three years upon. Our 
time was limited by joint resolution to thirty days; and yet, 
during a considerable portion of our limited time, the railroad 
question occupied our attention. While we were in session, 
an extraordinary convention, or gathering of farmers, known 
as the " State Grange of the Patrons of Husbandry," met in 
Des Moines. This body was composed of the officers called 
Masters and Past Masters of the subordinate granges, or 
lodges, of a new secret society of agriculturists scattered 
throughout the state. This State Grange, or convention of 
delegates, numbered over twelve hundred members, represent- 
ing, it was said, some seventy thousand farmers of Iowa. 
The meeting of this "Grange" lasted a week, and passed 
strong resolutions urging the legislature to enact a passenger 
and freight tariff law, and also presented an official petition to 
that effect. 

The members of the senate in favor of such a law prepared 
twelve sections, (mainly from the old O'Donnel bill,) to be 
inserted in chapter 5 of title 10, of the proposed code, and I 
was chosen to offer them in the senate at the proper time. 
This I did, and the first section wat? adopted almost ]yei'ore the 
railroad men could rally their forces. Tliis section limits the 
fare for passengers to three and one-half (3^) cents per mile. 
But the other sections, which fixed a maximum rate for the 
transportation of all kinds of grain, produce, lumber, manu- 
factures, and commodities, were lost by a tie vote, the presi- 
dent of the senate. Lieutenant Governor Bulis, refusing to 
vote, which was equivalent to voting against the sections. 
These sections were afterwards fixed to the chapter by the 
house, with an additional section, known as the " Keables 
Amendment," but were again lost in the senate for want of 
two votes. 

The commissioners had omitted from the proposed new code 
all the so-called "Doud Amendments," and reservations of 
control by the state over railway corporations, on the ground 
that they were local or special provisions not to be included in 



OSABP OF CAPITAL ON LEGISLATION. 169 

ft oode of general laws. But some of us thought that those 
reservations of control, and special contracts, were of too 
important a character to the people of Iowa to be entirely 
ignored, and so I prepared an amendn\ent to chapter 5, of title 
10, in the following words: 

** Sec. 6. All contracts, stipulations, and conditions, regard- 
ing the right of controlling and r^ulating the charges for 
freight and passengers upon railroads heretofore made, in 
granting lands or other property, or franchises to railroad cor- 
porations, are expressly reserved, continued, and perpetuated, 
in full force and eflfect, to be exercised by the general assembly 
whenever the public good and the public necessity requires 
such exercise thereof" This was adopted. 

I have thus hastily sketched the history of railroad legisla- 
tion in our state, and yet, perhaps, I have exceeded the space 
you generously allow me in your valuable work. Time and 
epa^ would not permit me to detail the skill exercised or the 
means used to defeat every act of legislation looking toward 
the control of railway corporations. 

To-day both the people and the government of this nation 
are, to a great degree, under the control of the consolidated 
money capital of the country, and a few individuals are at the 
head of this capital. These are men, mainly, who regard repub- 
lican or democratic institutions as too unstable for the security 
of wealth, and have no real love for our form of government. 
It remains to be seen what the people will do in the coming 
crisis. I have faith in the people. 

Yours truly, Samuel MoNun. 

Mr. McNutt tells what he knows, and gives us a correct idea 
of the means resorted to by these corporations to thwart the 
will of the people. In view of the vast wealth of these corpo- 
rations, their combination and consolidation with their abso- 
lute control of congress and state legislatures, and the centra- 
lization of power in themselves, we may well inquire whether 
our constitutional guarantees have not been so long disregarded 
as to be virtually destroyed. The question at issue between 
the people and these corporations is clearly marke^' ^nr^ '^''fined. 



170 HOKOPOUES AND THE PKOPI.B. 

ThiB great railroad oligarchy is gradually but surely overtiim- 
ing the principles upon which our govemment is founded. It 
is substituting a personal for a constitutional government, and 
to achieve its purposes it brings to bear its vast wealth and 
influence ; it bribes and buys legislators, and maintains 
throughout the country a vast army of employes, many of 
whom occupy high official position under the govemment. It 
now boldly proclaims the doctrine, that the interests of this 
great govemment and of raiboads are one ! 

On the other side of the question are the people, who begin 
to realize the oppressions of liis oligarchy. They find them- 
selves burdened with taxes; the value of the produce of the 
country consumed in unjust railroad charges; the halls of con- 
gress and of state legislatures cursed by the presence of men 
who take and give bribes in aid of the people's oppressors; 
their natural rights denied them ; the guarantees of the con- 
stitution disregarded; all doubtful points decided in favor of 
the power that is reducing them to slavery, and making their 
property and the fruits of their labor of no value. They b^in 
to realize that the final struggle must soon come, and that the 
question will be whether the peoplu, the sovereign people, or 
their oppresbors are to be the future rulers of the republic. 
The result is not uncertain. Legislatures and courts must 
restore to the people their constitutional rights. If these are 
denied, then, other means failing, the people, who are sovereign, 
TTivst take their rights by revolution. The self-evident truth 
that all men are equal, that they have equal rights to enjoy and 
possess property, aud to the protection of those rights in the 
courts, and that all should beEur their proportionate share of 
1 \e public burdens, must be recognized by all classes as the 
i preme law of this republic 



••^ 



fw. 



CHAPTER XVIII. 

THE ^ TRAIL OF THE SERPENT " IN THE INTERIOR DEPARTMSNT. 

WE have attempted to show the controlling influence of 
railroad corporations over the legislative department 
of the government, and its effect upon the people, withoat 
following it through all its various forms, our object being 
to present what we deemed sufficient evidence to direct the 
public mind to the great and growing evils resulting from 
this influence. We now desire to refer to the influence of 
these corporations over the executive department of the 
government. 

The administration of the laws being conflded to the execu- 
tive department of the government, their impartial and honest 
administration is of the greatest importance to the people. 
Congress, without the constitutional right, having granted 
charters and made large grants of lands and bonds to railroad 
companies, it became necessary that the executive department 
should have some kind of supervision over the companies. In 
the issuing of bonds and certificates for land grants; tlie trans- 
portation of mails, troops, etc.; the appointment of govern- 
ment directors, inspectors, and engineers; the transmission of 
telegraphic dispatches, and respecting many other matters 
connected with these corporations, special duties were imposed 
upon the president and members of his cabinet. The govern- 
ment directors, under the statute, had a place on all business 
committees of the Union Pacific railroad company. They were 
government officers, appointed by the president, and were to 
report from time to time upon the progress of the work and 
condition of the roads. They were prohibited from holding 
stock or being personally interested in the roads. Their reports 
were to be made to the secretary of t in dor. If these 
government directors had faithfully pp * Unties laid 

(171) 



172 MONOPOLTFJ» AND TITE FBOFLE. 

upon them by the law, the contract of the directon of the 
railroad company with the Credit Mobilier company coald not 
have taken place without their knowledge, which fiact ehould 
at once have been communicated to the secretary of the inte- 
rior. Nor could the directors of the railroad have organized 
themselves into a Credit Mobilier company and contracted with 
themselves to rob the goveniment and defraud the people 
without the knowledge of the government directors. And, 
unless we concede that they were totally unfit for the discharge 
of the duties imposed upon them by statute — "more sinned 
against thai] sinning ^' — we must conclude that they had full 
knowledge of all the abuses being practiced by the railroad 
companies, and failed to discharge their official duties. The 
national reputation these government directors had achieved 
in the halls of congress and elsewhere precludes the idea of 
their being ignorant of what they should have known, and we 
are forced to conclude that they had tlii^ guilty knowledge of 
the frauds being perpetrated upon the government and the 
people. Their action in the premises can only be explained on 
the ground that they were subject to the same railroad influ- 
ences which have cx^ntrolled congress and state legislatures. If 
their action was not governed by corrupt motives and pecu- 
niary consideratioub, that persuasive influence which emanates 
from these corporations blinded their minds and warped their 
judgments t4> such an extent as to induce them to wink at the 
frauds of the eoiiipHnies in the construction of their roads and 
the prosecution of the business connected therewith. Recent 
investigations show that some of those directors were controlled 
in their actions by pecuniary considerations; that these corpo- 
rations have been able to purchase the influence of the men 
selected by the president to protect the public interest, and 
that, by reason of such purchase, the sum of $16,000 per mile, 
in government bonds, has l)een duplicated on fifty-eight miles 
of the Pacific rojvd. Other abuses, such as the defective con- 
struction of the roads, unlawful payment by the government 
of engineering expenses, dishonest returns of the cost of the 
roads, and other minor but important abuses of the privileges 
granted to these companies, were permitted by these govern- 



TRAUD IN THE INTERIOB DEPARTMENT. 173 

ment direeton' without objection — showing, beyond all rea- 
Bonable doubt, that their dnties, prescribed by acts of oongresSy 
were of secondary importance when the interests of the 
corporations or of these government directors were to be 
considered. 

While the reckless and dishonest transactions of the com- 
pany directors were snch as to call out a protest from an hon- 
est engineer employed on the road, prompting him to resign 
his position as chief engineer rather than be a party to frand 
and scandal, these government directors seem to have remained 
silent and inactive. A contract had been entered into with a 
man by the name of Hoxie, who had neither personal means 
nor position to command any considerable amount of capital, 
for the constrnction of a portion of the ITnion Pacific road. 
While this contract did not possess all the peenlarities of the 
contract with the Credit Mobilier, it was such an outrage upon 
right and justice as to elicit from the chief engineer, Peter A. 
Dey, the following letter, addressed to General John A. Dix, 
after having tendered hts resignation as chief engineer of the 
Union Pacific road to General Dix, who was then president of 
the company. Mr. Dey says: 

"My views of the Pacific railroad are peculiar. I look 
upon its managers as trustees of the bounty of congress. I 
cannot willingly see them take a step in the incipience of the 
project that will, I believe, if followed out, swell the cost of 
construction so much that by the time the work reaches the 
mountains the representative capital will be accumulated so 
much that at the very time when the company will have need 
for all its resources, of capital as well as of credit, its securities 
will not be negotiable in the market. From ray very boyhood 
I have associated Mr. Cisco and yourself with Mr. Bronson 
and Mr. Flagg, men whose integrity, purity, and singleness of 
purpose have made them marl^ed men in the generation in 
which they lived. Of course my opinion remains unchanged. 
You are, doubtless, uninformed how disproportionate the 
amount to be paid is to the work contracted for. I need not 
expatiate upon the sincerity of my course, when you refl^f 



174 MONOPOIJFS AND THE PBOPLE. 

upon the fact that I have resigned the best position in my pro- 
fession this country has ever offered to any man. 

." With respect, Peteb A. Dbt." 

Mr. Dey protested against the extravagant amount agreed to 
be paid Hoxie. The cost of the sections of the road contracted 
to Hoxie was $7,806,181. The amount agreed to be paid Hoxie 
for the work was $12,974,416. Mr. Dey saw that this man 
Hoxie was a st/raw mcm^ and that near $6,000,000 were to be 
divided among the directors as the profit on this contract, and, 
as engineer, ho protested against it. Yet these government 
directors, whose sole duty it was to look after and protect the 
interests of the government and the people, failed to discover 
and report these abuses to the secretary of the interior; or if 
the same and the Credit Mobilier transactions were so reported, 
then the influence of these corporations controlled the depart- 
ment of the secretary. The truth is, the position of these 
government directors was such that without a total disr^ard 
of the statutes, and their duties under \% it was not possible to 
keep all knowledge of these gross abuses from the department 
But one conclusion can be drawn from the facts, which is, that 
the government directors, influenced by these powerful monopo- 
lies, were unfaithful to the trust confided to them by the presi- 
dent. 

Under the statute, the secretary of the interior has the gen- 
eral control of the issue of bonds, certificates for lands, rights 
of way, etc. The government directors were bound to report 
to him. If the duties imposed under the law had been faith- 
fiiUy discharged by him, the great abuses practiced by the 
Pacific railroad companies would have been prevented. The 
Hoxie contract, the Ames Credit Mobilier contract, and the 
Davis contract were all made for about double the cost of 
building the respective sections of the road covered by these 
contracts, the actual cost of t^ese respective sections being 
$50,720,957, and the amounts allowed the contractors being 
$93,546,387. In this amount is included $1,104,000, which 
was a duplicate payment allowed Ames for work done, and 
once paid for under the Hoxie contract These three jobs put 



FRAUD IN THE nfTEBIOR DEPARTMENT. 175 

into the pocket of the Credit Mobilier company a net profit 
of $iS,929,337, a large part of which wius in subsidy bonds 
issned by government. These bonds could only issue after the 
approval by the secretary of the interior of the report of the 
government directors. If the secretary had discharged his 
djktjj or if the interest of the people, which he was supposed 
to be protecting, and not the interest of these companies, had 
controlled his action, duplicate hands would not have been 
issued at the rate of $16,000 per mile for more than fifty miles 
of the road. Nor would certificates for land have issued to 
the companies while they were openly cheating, deft^uding, 
and robbing the government and people. Let the reader look 
at the laws of congress chartering the roads, with the different 
amendments, and learn the duties of the secretary of the inte- 
rior respecting their construction and the issuing of bonds 
and land certificates, and he will conclude that the secretary 
was ignorant of what the law made it his duty to know, that 
he was inexcusably negligent in the discharge of his duty, or 
what is most probable, that the same potent influences that 
controlled congress in aiding these companies, found their 
way successftilly to the chief parlor of the interior department. 
Without the secretary's approval ot the companies' work and 
accounts, they could not possibly have committed such gross 
frauds upon the government. 

If additional proof of the fact that the secretary of the inte- 
rior was influenced by, and used his official position to assist 
the railroad corporations, in the raidfi upon the treasury, was 
needed, we have it in his action relative to the homestead and 
preemption rights of settlers upon the public lands within the 
limits fixed by congress for the selection of lands by the difler- 
ent railroad companies. In all cases where lands have been 
granted to railroad companies, lands to which preemption 
rights attached at the time the line of the road was fixed have 
been saved to the preemption and homestead claimants. In 
many instances the railroad companies have not been able to 
find, within the limits fixed, the amount of lands granted to 
them belonging to the government. This has caused them to 
make war upon preemption and homestead claimants. If theee 



176 MONOPOLIES AND THK PEOPLE. 

claimantB could be forced from their lands, some millions of 
acres would be thus seized by, and allowed to, the raih*oad com- 
panies. The practice of going upon the public land under the 
preemption and homestead acts had become so common, that 
these claims had been recognized by the public and the gov- 
ernment as vesting in the claimant a title which could only be 
defeated by his failure to comply with the provisions of the 
law respecting the perfection of his title. No one, save where 
two or more preemption claimants were contending for the 
same tract, could interfere; nor is there any provision of statute 
by which railroad companies can call in question the preemp- 
tion or homestead right. In the absence of any contest be- 
tween preemptors, the claimant has only to show a substantial 
compliance with the law, pay the required amount, and obtain 
his title. So, also, in regard to homestead rights. Nor did 
any difficulty arise until railroad companies began to interfere. 
The acts granting lands to railroad companies made no provi- 
sion for the selection by them of lands held by preemption or 
homestead claimants at the time the lines of their roads were 
fixed, and subsequently abandoned. The companies applied 
to the secretary of the interior, and procured from him a con- 
struction of the statutes, giving them the right to select as 
railroad lands all such so abandoned. This was the first decis- 
ion in their favor, and committed the secretary to their interest. 
A war upon preemption and homestead claimants was b^^un, 
and the representation to the department that a claimant had 
abandoned his claim was sure to pass the title to one hundred 
and sixty acres to the company. But something more must 
be done to get hold of the claimed land. The question as to 
the regularity and validity of the settler's claim is raised by 
the companies, and then they apply again to the secretary of 
the interior. While the statute respects and protects the occu- 
pancy and rights of the claimant, the secretary, to aid the 
railroad companies, interpolate the word " valid," and holds V 
that if the claim is invalid, the railroad companies can drive 
off the claimant and take his land. The action of the depart- 
ment gave the companies an advantfige over the claimant 
which was almost equivalent to the destruction of his claim. 



FRAUD m THE ENTBBIOK DEPARTMENT. 177 

Many daimants became alarmed, and did just what the oompa- 
nies desired — thej abandoued their claims to their oppressors, 
and the companies made large gains. But the claimants were 
not yet entirely in the power of their oppressors, and resort is 
again had to the department, and the settlers are placed entirely 
at the mercy of these monopolists. The interior department 
issued an order under date of June 22d, 1S72, allowing railroad 
companies to contest the right of preemption and homestead 
claimants to their quarter-sections. While the act of congress 
absolutely prohibited railroad companies from interfering with 
the rights of these claimants, the interior department, in the 
interest of these giant monopolies, in violation of the statute, 
by interpolation and a forced construction of the law, allowed 
these corporations to appear and dispute the claim of the poor 
pioneer who had gone in advance of railroads and preempted 
a small tract.of land for a home for his family, before the com- 
pany disputing his right was organized, or had thought of 
locating a railroad in his vicinity. The preemption and home- 
stead laws were passed for the benefit of the actual settlers of 
the country. If they get their lands, they pay the government 
the price fixed by law; but if the railroad companies get these 
lands, they aid in building up and strengthening a monopoly 
already too great for the welfare of the country. The depart- 
ment having lent its powerful aid to this monopoly, and, by 
unjust rulings, interpolations, and decisions, assisted in turn- 
ing these poor men adrift, and depriving them of their lands 
and years of toil, already more than one million of acres — 
that of right, and under the law, properly interpreted and 
administered, would have belonged to actual settlers — have 
become the property of these railroad companies. Claimants 
are becoming alarmed at the action of the department, and are 
leaving their lands, choosing to lose their claims and the years 
of toil expended upon them, rather than defend against these 
companies, backed by the department. 

To still further show the qtiasi collusion between the 
department and these great corporations, let us look at the 
circular issued to the difierent land offices from the depart- 
ment in June, 1872. The circular says : 



178 MOKOFOLIBB AND THE PEOPLE. 

^ A preemption or homeetead claim of record is of courae 
prima facie evidence of a valid right; yet it may occnr that 
snch a claim has a fraudulent inception. When such is the 
V case, the claim is of course void ab initiOy and does not defeat 
the right of the railroad. In view of these rulings the follow- 
ing is communicated for your information and government, to 
theend that the rights of all parties may be protected, and 
and the spirit of the grants fully complied with : 

^^Ist. In relation to preemption claims, the preemption 
law requires that a person must be over the age of twenty-one 
years, or the head of a family, a citizen of the United States, 
or a perso^ who has filed a declaration to become such, and 
also that a person may file a preemption claim for such land 
as he may have settled upon, thus imposing conditions as pre- 
requisite to the initiation of a claim. 

^ 2d. In relation to homestead claims, the law requires that 
H person must be over twenty-one years of age, or the head of 
a family, a citizen of the United States, or one who has declared 
his intention to become such, and under the first and third 
sections of the amendatory act of March 21, 1864, the persons 
claiming the benefit of said sections must make settlement 
upon the tracts before they can obtain the benefit of said sec- 
tions. Therefore, as the fraudulent character of the preemption 
or homestead claim in its inception may be brought in ques- 
tion, it is right that the parties in interest should have an 
opportunity in all cases to be heard. With this view you are 
required, 

" 8d. When application is made by a railroad company to 
select tracts which are covered by . existing preemption or 
homestead claims at the date of the right of the road attach- 
ing, but subsequently relinquished or abandoned, to allow the 
company to file such proof as they may have in support of 
their right to the land, or to have hearings for the purpose, 
and should the evidence be satisfactory you will permit the 
selections. 

"4th. When any person applies to enter a tract of such 
lands, claiming the right to do so by reason of such prior 
abandoned claim, you will order a hearing, notifying the rail- 



FRAUD IN THE IMTEKIOB DEPARTMENT. 179 

Toad company, as well as the preemption or homestead claim- 
ant, so that they may produce such evidence in support of 
their right as they may have to Aimish. Your inquiry must 
be directed to the personal qualifications of the original claim- 
ant, and his compliance with the law prior to filing an entry; 
and I desire to enjoin upon you the necessity of excluding all 
testimony not material to showing the {acts upon the subject 
of inquiry. You will, however, be careful that all such &ct8 
are brought out, and if necessary to this end you will your- 
selves examine and question the witnesses. You will in all 
cases give the parties interested personal notice of the time 
and place of hearing, when their whereabouts are known, or 
they can be reached by such notice. In other cases you will 
cause the notice of contest to be published at least once a week 
for four weeks in the newspaper having the largest circulation 
in the vicinity of the land. Parties initiating a contest must 
provide for paying the expenses thereof, but when the case 
comes before you for trial you can apportion the expenses 
according to the equities of each case. Your particular atten- 
tion is called to the fact that in some of the earlier railroad 
grants, lands covered by homestead claims, which may subse- 
quently be cancelled, are not exempted from the operation of 
the grant. Therefore, in such cases, the tracts revert to the 
grant, and you will recognize no application for these lands by 
other parties, but will pay due regard to the rights of the 
grantees. You will in no case allow preemption filing, or 
homestead entry on this class of lands, without instructions 
from this office." 

This circular, in the interest of railroad companies, is sig 
by Willis Drummond, commissioner, and directed to r s 
and receivers of district land offices. While the acts of con 
exclude from the grants to railroad companies all Is [ 
by preemption and homestead claims, the seer 7 of t 
interior says it means valid claims. He th de 
claims invalid or fraudulent when there has not 1 a li 
compliance with the statute. If the pre^mptor fi his < 
one day or one week before he commenced his occu ion, his 
daim, as against the railroad company, is fnp ^^ ^f 



180 MONOFOUBB AND THE PBOPLK. 

for some canse, after having complied with all preliminaries, 
he should leave his claim for a day or a week, it could be 
treated as abandoned, and his right would be lost. These 
rulings, in favor of railroad companies, and adverse to the 
settlers, having been made, the companies were not slow in 
taking advantage of them. Men who supposed their claims to 
be valid, who had invested their all in improving them, have 
had their validity questioned, or have been charged with 
abandonment. The first intimation a settler has, is a notice 
to appear and defend the home of his family against the claim 
of a powerful corporation that is seeking to take it from him. 
He must submit tx) the alternative of losing his home at once, 
or of protracted, expensive litigation, with the assurance that 
he is combatting a powerful adversary before a tribunal that 
has already prejudiced his case in favor of his opponent. All 
that the railroad companies need do to defraud the settler is 
to satisfy the register or receiver that, under the rulings of the 
department we have quoted, the settler's claim is invalid, or 
that he has abandoned it. 

We draw no fancy sketch. The circular speaks for itself, 
and the large number of men who have been compelled to 
leave their preemption and homestead claims, with the con- 
stantly increasing quarter-sections of land that are being added 
to the railroad grants, attest the truth of our statements. We 
are not aware of any law of the United States recognizing the 
right of railroad companies to become parties in a contest con- 
cerning a homestead or preemption right. Nor do we believe 
that the interior department of the government can legally 
authorize these companies to become claimants for land held 
by settlers under act of congress. If any question arises 
between two preemption claimants, the commissioner of the 
general land office decides the dispute. If any question is 
raised as to whether the claimant is entitled to his preemption, 
there are, under the acts of congress, but two parties to the 
controversy — the claimant himself and the interior depart- 
ment The order allowing railroad companies to appear as 
parties, and by virtue of numerical strength and immense 
wealth and influence, to overpower the settler, is doing him 



FRAUD IN THE UmSBIOB DEPASTHXRT. 181 

injuBtioe, a^ well as degrading a high official position, and 
sustains our charge that these railroad companies influence 
the interior department of the government. We think we 
have shown that the whole strength of this department is 
used in favor of these great monopolies, and against the inter- 
ests of the people. While we do not charge the officers of 
this department of government with intentional wrong, we do 
charge that this great corporate power, which has such unlim- 
ited influence over the legislative department of the govern- 
ment, has virtually taken control of the department of the 
interior in cases where its interests can be subserved by the 
influence of the department 



CHAPTER XIX. 

THB MONOFOLISIB AT THE DOOB OF THE WHITE HOUSB. 

T HK influence of this great corporate power does not spend 
all its force at the interior department, but it is seen 
haoding in its card at the white house. 

While we claim that railroads and other corporations have, 
to a considerable extent, influenced the distinguished occu- 
pants of the presidential chair, we do not wish to be under- 
stood as intimating that any of our chief magistrates have 
acted corruptly. We simply assert that this great corporate 
interest has secured favorable action irom our presidents when 
they have been appealed to. As will be seen by their perusal, 
the acts of congress chartering the Pacific railroad and branches, 
imposed certain duties upon the president in connection with 
their location and construction. In the discharge of these 
duties the wishes of the companies were in all cases complied 
with, and in some instances to the injury and at the cost of the 
government and the public, and under circumstances leaving 
no doubt that the president acted wholly upon the representa- 
tions of the companies. 

In the act of July, 1864, the Union Pacific charter was so 
amended as to permit any company organized under the laws 
of Iowa, Minnesota, Nebraska, or Dakota, and designated by 
the president of the United States, to construct a railroad from 
Sioux City, Iowa, to connect with the Union Pacific road at 
some point not farther west than the one-hundredth degree of 
longitude. A company was organized under the laws of Iowa 
to build a railroad from Sioux City to Missouri Valley in the 
same state, the latter point being some thirty miles east of 
i9ioux City, and seventy or more miles south. Another com- 
pany was organized to build a railroad from Missouri Valley 
to Fremont, in Nebraska, the latter place beinc: a point on the 

ass) 



THE MONOPOLIfirFB AT THE DOOB OF THE WHITE HOUSE. 183 

Union Pacific. These companies were incorporated by a few 
men, among whom were several members of congress who had 
aided in the passage of the act of July, 1864. Through the 
influence of one of the incorporators, then a member of con- 
gress, now of the United States senate, the president desig- 
nated these companies as the companies to build the Sioux 
City branch of the Union Pacific, and their roads, representing 
two sides of a triangle, were adopted as a ^pnch road. The 
road is known as the Sioux City & Pacific. A road running 
westerly from Sioux City to Fremont would be about sevenly- 
five miles in length. "Die road, as constructed between these 
two points, is, as given in the Rail/road Ma/rmal^ one hundred 
and seven miles. The act of congress required the road to 
be constructed on the most direct and practicable route. This 
road received the same privileges, subsidies, and grants as the 
main line, with an addition of eighty sections of land per 
mile. Now it cannot be presumed that the president, acting 
on his own judgment, uninfluenced by the railroad company, 
would have designated these companies, and these roads, as 
the Sioux City branch of the Union Pacific road, with one 
hundred sections of land and $16,000 subsidy bonds for every 
mile of the road. We have given this instance to show the 
direct influence of this corporate power over the president. 
This great influence, so dangerous to the welfare of the 
country, is indirect in its action. Vast mumbers of men have 
their funds invested in railroad stocks and bonds. They 
engage in Wall street speculations; they buy and sell stocks 
and bonds; they operate in gold and values, and have no 
interest in common with the laboring and producing classes 
of the country. These corporations own and control property 
worth billions of dollars; they rule the finances of the 
country; they have tens of thousands of men in their employ; 
as they increase in strength and wealth, they are constancy 
striving for greater powers and privileges. Their lobbyists 
and retainers surround every department of the government. 
When public oflSces are to be filled, they unite in favor of men 
in their interest; and when decisions are to be made upon 
questions afiecting* their rights and oblifi^ations, they take care 



184 KONOFOLIEB AlO) THB PEOPLE. 

that their friende shall be in poBition to make or shape these 
decisions. The president, with his appointing power, if influ- 
enced in their favor, becomes an important ally. In his 
appcHntments to oflJce, it is not to be expected that he can 
personally know the qualifications and views of every nominee. 
He must, of necessity, rely upon others, to a great extent, in 
making his selections. Next to legislative action in their 
favor, railroad ^mpanies are most deeply interested in the 
judicial decisions affecting their interests. Judges are apt to 
be influenced by the same motives that prevail with other 
men. Years spent by men as railroad attorneys, or as attor- 
neys for any other great interest, will, to a certain extent, 
control their reasoning and decision upon questions coming 
before them should they be promoted to tlie bench. In close 
relation with, and next in importance to the decisions of 
oourts, on points affecting this great corporate interest, are 
the rulings and decisions of the attorney general of the 
United States. If these important ofSces can be filled by 
persons whose past pursuits have demonstrated that they 
entertain views favorable to the interests of these companies, 
an important gain is made at the start in their tavor. To 
secure such appointments, all and every influence at the 
command of these corporations are brought to bear upon the 
president. The services of the most influential men, in 
congress and out, are engaged; the nanie^ of the candidates 
selected are presented for the consideration of the president, 
and their appointment urged by the whole railroad and cor- 
porate interest of the country. The president, following a 
long established precedent, usually appoints the persons who 
are most strongly recommended. This fact is well understood 
by these corporate interests and hence their vigilance and 
activity. We do not say that the president, in yielding to 
this tremendous pressure, acts from improper motives. We 
simply assert that this pressure is used, and that it is scarcely 
to be resisted. 

The fact that judges of ability and integrity differ in their 
construction of the constitution and laws, is well understood 
by the men who lead and control the corpontte interests of the 



THB HONOFOLIStB AT THE DOOB^Ot THB WHITE HOUSE. 185 

c5oantry; as also the further fact that the time is not distant 
when the question whether the people or railroad corporations 
shall govern, must be determined. To prepare for this issue 
they use their great influence to have the important positions 
in the government occupied by their friends. To a consider- 
able extent they have succeeded. 

Mr. Ackerman, of North CaroUna, was attorney general 
He was what might be termed a strict constructionist. His 
views were conservative. As the legal adviser of the executive 
department, his opinions were adverse to the interests of the 
railroad companies on certain questions submitted to him. At 
the request of the president he resigned, and Judge Williams, 
of Oregon, was appointed in his stead. Ko one will question 
the integrity of the present attorney general ; yet is was a 
well-known fact that at the date of his appointment he was 
one of the attorneys of the Northern Pacific railroad com- 
pany; that he was fully committed to the railroad interests, 
and that his appointment was urged by railroad men in all 
parts of the country. By his appointment a friend of these 
corporations became a member of the cabinet, and an import^ 
ant ally is present whenever questions affecting their interests 
are discussed in executive council. 

A question of the greatest importance to these corporations 
was the construction to be given to the statutes of tlie United 
States, and especially the " Legal Tender Act." The first of 
the legal tender acts was passed July, 1862. This was followed 
by other acts increasing the amounts of legal tender issues. 
Prior to the passage of these acts railroad corporations had 
issued and sold many millions of bonds, and stipulated that 
both principal and interest should be paid in gold. Soon after 
the issue of legal tender bills their value depreciated, and from 
that time to the present there bas been, and still is, a wide 
margin between their value and coin. If these railroad com- 
panies could pay their bond indebtedness with legal tender at 
par, a saving of from ten to fifteen dollars could be effected 
on every hundred so paid. In the year 1869 the question 
whether this act was retroactive in its operation or effect was 
pWi M H Bi t <d to the supreme court The court waa then composed 



186 HONOFOUBS AND THE FEOFLE. 

of eight justices. When the case involving this question was 
pi^esented to and decided by the court, but seven of the jus- 
tices were on the bench. Of these, four, including tlie chief 
justice, were of the opinion that the statute did not affect 
contracts made before its passage, and decided that these rail- 
road companies must pay their bonds in coin, according to the 
contract. This decision was not acceptable to this vast corpo- 
rate power. It was condemned by railroad men throughout 
the country. The president was approached on the subject, 
and his great influence was besought in the matter. Four of 
the justices (one-half of the court) having held adversely to 
the corporations, a full bench could not reverse their decision. 
To efiect a reversal one of the four must change his opinion, 
or the number of justices must be increased. The latter alter- 
native was decided to be the more feasible, and the president 
asked congress to increase their number to nine. The reason 
urged was, that upon important questions, before a full bench, 
the court might be equally divided, and important questions 
would remain undetermined. The railroad interest was fully 
represented in the lobby at Washington, and congress provided 
for an additional justice. About this time one of the justices 
retired from the bench, making a vacancy, and rendering it 
necessary for the president to appoint two new justices. This 
was a grand opportunity for the railroad interest. If men who 
were identified with them could be appointed, the decision on 
the " Legal Tender Act " could be reversed, and they could 
save from ten to fifteen millions of dollars on every hundred 
million of dollars due from them. Not only could they save 
this amount, but in future, as the members of the court are 
appointed during life or good behavior, they would have no 
apprehensions of a decision against their interest. At once 
the president was importuned to appoint William Strong, of 
Pennsylvania — a man who was fully identified with them by 
education and employment, he being attorney for the Pennsyl- 
vania railroad company — and Joseph P. Bradley, of New Jer- 
sey, who was also identified with this interest, he being the 
attorney of the greatest railroad corporation in that stata 
Neither of these men had any national reputation; bat all at 



TrtC MOHOPOLISrS AT THE DOOR OF THE WHITE HOTTfiE. 187 

once thfi city of Washington, as well as the whole country, was 
enlightened as to their great judicial worth, and railroad n*en 
throughout the country were urging their appointment. It was 
publicly announced, and not contradicted, that they were in 
favor of reversing the decision of the court on the legal tender 
act, and their appointment was urged for this reason. This 
influence controlled the president. These gentlemen were 
nominated by him, and their appointment was confirmed by 
the senate in 1870. The decision on the legal tender act was 
reversed, and railroad men were happy. As we shall attempt 
to show, when we treat of the controlling influence of these 
corporations upon the finances of the country, this reversal was 
most baneful to the country, and detrimental to the best inter- 
ests of the people. We do not wish to be understood as accus- 
ing the president of being governed by improper motives in 
the appoiutments of Messrs. Strong and Bradley to the supreme 
bench; but we do mean that the railroad interests, by concert 
of action, procured these appointments; it being known, or at 
least well understood that these appointments would insure a 
reversal of the decision, as we have recounted, and that by such 
reversal their interests would be greatly subserved. Nor do we 
wish to be understood as accusing the persons so appointed 
of lacking the requisite ability for the honorable stations for 
which they were selected, or that their decisions were governed 
by personal considerations, or that they reversed said former 
decision to specially subserve the interests of railroad corpora- 
tions. We have long since come to the conclusion that judges 
of courts, like other men, are influenced by surrounding 
circumstances ; that they are not infallible, and that it is no 
unusual thing for the most eminent judges to differ upon ques- 
tions submitted for their decision. While these decisions are 
honestly made, they are often controlled or dictated by extra- 
judicial considerations. As we shall have occasion hereafter 
to examine this subject when treating of iL? intimate and con- 
trolling relations between these corporations and the courts of 
the country, we are content to leave the case of their influence 
with the executive department to the proof submitted in these 
three appointments of Williams, BFadley^ and Strong. 



CHAPTER XX. 

THX UAITJCD BTATEB TBEASTTRY THE VASSAL OF WALL STREET — 

STOo^ "operations" explained. 

WE now beg to call the reader's attention to the financial 
operations of the monopolists, and the coarse resorted 
to by them to control the finances of the country. 

There are now (January, 1873,) seventy thousand one hun- 
dred and seventy-eight miles of railroad completed in the United 
States and territories. At an expense of $35,000 per mile, the 
total cost of these roads is $2,456,230,000. The cost, as given 
by the companies, is $3,436,638,749, or $48,970 per mile. In 
contemplation of law, and as reported, this co^t is represented 
by stock certificates, and is supposed to be paid up. If the 
roads cost but $35,000 per mile, then $980,408,749 of the stock 
certificates (that amount being the excess over actual cost) 
have only an imaginary value. In addition to the stock cer- 
tificates representing the above sum of $3,456,230,749, the 
railroad companies have issued and put upon the market their 
bonds to the amount of $2,800,000,0<»0, thus making their 
roads represent the enormous sum of six billions two hundred 
and thvriy'six millions six hundred and thirty-ei^ht thousand 
seven hundred andforty-nine dollars^ or eighty -eight thousand 
eight hundred a/nd seventy-two dollars per mile. The only real 
value all these bonds and certificates of stock represent is the rail- 
roads. These we have put at $35,000 per mile. Of course some 
lines of road exceed this valuation; but an examination of the 
actual cost, as reported by the engineers of the respective roads, 
will show that much the larger portion of the roads has cost less. 
Now let us look at the amount of the capital represented by a 
few of these roads, as reported in the Railroad Manual and 
TheStockholder. The Chicago, Burlington & Quincy is reputed 
to be one of the bwt and moat pmdenily maaaged roada in thi9 



189 

oonntxy- This road represents in stock and bonds the sum of 
$32,845,880, or $43,292 per mile. On the other extreme we 
will take the Central Pacific, which represents the sum of 
$182,208,000, or $130,000 per mile. The Atlantic & Great 
Western (an organization of the New York, Pennsylvania & 
Ohio) represents the sum of $109,000,000, or about $256,000 
per mile. The Cedar Eapids & Missouri River railroad repre- 
sents the sum of $11,334,000, or $41,000 per mile. The 
Chicago, Hock Island & Pacific represents the sum of 
$25,717,000, or $56,667 per mile. The Erie represents the 
sum of $112,935,710, or $125,750 per mile. The New York 
Central & Hudson River railroad represents $104,660,049, or 
$142,656 per mile. The Union Pacific represents $112,91 1,619, 
or $109,507 per mila We give the above as samples of the 
amounts represented by the different roads. In some other 
instances the stocks are ^^ watered " more, and in others less 
than in the roads above named. Taking all the roads in 
the country, and adding together the stock and bonds 
issued, they represent $3,800,408,749 more than their actual 
cost. It will not be out of place here to state that the only 
resource these railroad companies have for the payment of 
interest and dividends on their stock and bonds, representing 
the sum of $6,236,638,749, is the earnings of their roads. 
While a low rate of charges would pay fair dividends on the 
actual cost of the roads, yet in order to pay dividends on their 
"watered " stock, and interest on their bonds, oppressive and 
extortionate rates must be charged and collected. The men 
who control these great monopolies, viz.: Col. Soott, who con- 
trols roads representing about $700,000,000; Vanderbilt, who 
controls about as great an interest; Drew, Gould, and some 
few others of the principal railroad men, care but little about 
the prosperity of the country, or the profits made by their 
roads, save as a basis for their Wall street speculations. The 
roads serve as a basis for financial operations. Like the old 
" wild cat " banks that issued bills without regard to stock or 
capital, so tlie roads controlled by these railroad monarchs are 
loaded with " watered " stock and bonds, until their value as 
roads are destroyed, and passoigers and ship^rs are oppres- 



190 WaSOTCfLOB AND THB FBOFLB. 

Bively taxed for the purpose of giving some sort of market 
value to the bonds and "watered" stock with which Wall 
street is flooded. The issuing of stock certificates goes on, and 
will continue as long as dividends can be declared. At the 
present time the railroads of the country collectively represent 
about three times their value, or actual cost. If the people 
were not taxed on " watered " stock and bonds, dishonestly 
isaued, the rates charged for transportation would be but little 
more than one-third the figures of the present tarifif. The vast 
wealth claimed by railroad corporations is about two-thirda 
pure fiction, and but for the extortions practiced upon the 
public, their stocks and bonds, beyond the value of their roads, 
would not be considered in market; but so long as interest at 
the rate of six, eight and ten per cent, can be drawn from the 
public, they are marketable. These stocks and bonds are 
owned or controlled by the men who not only manage the rail- 
road interests, but also the bond and stock market of the 
country. Being the leading spirits among Wall street brokers, 
using their railroads for the purpose of aiding in their stock- 
jobbing speculations, by compelling them to earn interest on 
all the worthless stocks and bonds they put upon the market, a 
fictitious value is given to them. Having their principal place 
of business in the commercial metropolis of the country, 
being able whenever their interests demand it to " comer " 
the money of the country, it could be hardly expected that 
the treasury department of the government would escape their 
control. If a conflict should arise between the secretary of the 
treasury and these vast monopolies, the question of which side 
would come off victorious could not be doubtful. 

The circulating medium of the country is, in legal tender 
notes, $356,000,000. That of national banks, excluding their 
reserves, is less than $300,000,000. This currency is scattered 
over the c-ountry — a small portion of it is in foreign countries. 
No coin is in circulation, most of it being locked up by Wall 
street brokers, in the interest of these railroad corporations. 
Many of the national banks of the country are owned by rail- 
road men. In addition to the immense earnings of the rail- 
roads, which under the present system are concentrated in the 



STOCK ^^OPEBATIOKS" EZFLAINBD. 191 

eity of New York, almost the entire amount of stock and 
bonds issued bj railroad companies is either owned or repre- 
sented in Wall street, and as occasion demands is pnt upon the 
market. Thus the whole of this corporate influence can be 
used at an j time in a financial conflict with the government. 
It has been and is still being used against the government. 
Under the revenue laws of the country, import duties are paid 
in coin. A part of the sum thus real^ed is applied in payment 
of the national debt. There is no good reason why the secre- 
tary of the treasury should not apply this sum directly in 
payment of government bonds. Such a policy would tend 
toward the resumption of specie payment, making the money 
of the people of equal value with that used by the government. 
This would not suit railroad companies. So long as a margin 
can be preserved between coin and currency (and for their 
purposes the wider the better) under the decision of the 
supreme court they can discharge their bond indebtedness, con- 
tracted to be paid in gold, with depreciated paper at par, and 
save the margin. In order that a margin may be continued, 
instead of making direct payment of government bonds to the 
direct holders thereof, the secretary of the treasury is required 
to sell gold in New York, and purchase or liquidate the bonds 
with the proceeds of these sales. It is noticeable in all cases 
of the sale of coin, that Wall street brokers are the purchasers, 
and usually at less than the quoted market value. By this 
means the interests of these railroad managers are subserved in 
more than one particular. Their brokers purchase and comer 
the coin sold, and prevent it going iiito circulation, and the 
margin between coin and currency is preserved. The day for 
the resumption of specie payment is kept in the distant future. 
The importing merchant must buy gold of the brokers (who 
are the railroad managers) at its market value, to pay govern- 
ment duties on their imports, and thus the companies make 
the difference between the price paid and the price obtained. 
When some favorite railroad stocks are to be forced upon the 
market, these brokers, who can do so at pleasure, supply the 
money market, and sell the stocks at a large profit; and when 
the object is to reduce the value of stocks, they withdraw from 



19S XOBOFOLnDS AMD THE FBOFLX. 

Oircnlation a Bufficient amount of the currency to cause a 
stringency in the market, until their end is accomplished. 
Controlling absolutely the gold market, as well as the secretary 
of the treasury in his financial operations, they have only to 
comer a few millions of currency to make the entire commerce 
of the country subserve their special purposes. With all of 
their interests united, all their business concentrated in Wall 
street and controlled by six or eight leading men, they regulate 
the finances, fix the vidiif of the produce of the country, and 
hold the producers of the great west in a state of vassalage 
which has no precedent, even in despotic countries. The 
secretary of the national treasury, who is supposed to control 
the financial department of government, is in fact the servant 
of these men, and whatever policy is beneficial to their inter- 
ests must be adopted by the government. To the uninitiated 
it may appear impossible for a few men in New York to exer- 
cise a controlling influence over the financial policy of the 
nation, but if we remember that all the wealth of these cor- 
porations, actual and fictitious, is concentrated in that city, 
or controlled by men doing business there, and that an 
immense stream of money, received by these corporations from 
passengers and shippers, is constantly flowing into Wall street 
from all parts of the country, we can understand their power 
and appreciate their influence. The fact that it requires more 
than twice as much money to pay the interest on the bonds issued 
by these corporations, and dividends on their stock, as would pay 
the interest on the national debt, is significant. When private 
corporations combine their interests and become so powerful as 
to require an annual expenditure of more than twice the amount 
expended by the United States government, and when their 
revenues more than quadruple those of the government, they 
must of necessity exercise a controlling influence over the 
financial and industrial interests of the country. This fai^t is 
now being demonstrated by a combination of the railroad 
corporations of the country, as the people know to their cost 
It will be proper here to detail the modus operandi of these 
railroad companies at their headquarters in Wall street. We 
read of large operations in stocks and bonds, as well as in gold, 



193 

and are apt to conclude that sales and purchases are made by 
regular transfers in a fair and legitimate manner. Such is not 
the case. Among the initiated sales are pure fiction in many 
cases, and in others it is but purchasing or selling the chance 
of an advance or decline in the price of stocks, bonds, or coin. 
To call these transactions by their right name — they are 
fu>thing bttt gambling. If legitimate sales are made, it is with 
outside parties, or to the uninitiated. The corporation rings 
congregated in Wall street, calling themselves bankers and 
brokers, sell to, or purchase stocks from, each other, without de- 
livery or even payment, all the money passing between the seller 
and purchaser being the margin between the price agreed to be 
paid and the market reports at the time fixed for deUvery. To 
illustrate, let us suppose that certain railroad stock is quoted 
at ninety-three cents, or seven per cent, below par. A, who 
beUeves that there will be no further rise in price, but that the 
same will decline, offers B $10,000 of this stock at ninety-one 
cents, to be delivered in three days. He has no stock, but 
believing it will decline to ninety cents or less, within the time 
fixed for delivery, he expects to buy at a still lower rate than 
he has agreed to sell, or to borrow it for a consideration if the 
decline does not meet his anticipations. Or he will settle his 
contract with B by paying him the difference between the 
market value at the time of delivery and the price at which he 
agreed to sell. The same process is gone through if the sale 
is made with the expectation of the stock advancing in price. 
A agrees to purchase of B four days after the date, $15,000 in 
stock at ninety-five cents, being an advance of two per cent 
on the market price on the day of sale. The stock does not 
advance, and at the time for delivery A pays B the margin 
between two cents on the dollar, and the market price. No 
stock has passed between them. It was a fight between a 
*' bull " and a " bear " for the margin. 

Nearly all of the financial operations of Wall street brokers 
arc of a like character. Some of them involve immense 
amounts. One man makes a fortune, and another becomes 
bankrupt in a day. Wall street is the place where men of all 
creeds and nationalities meet to engage in this kind of gam- 
13 



194 KONOPOUES AND THB FBOFLX. 

bling traflSc Men run about the streets, into the " gold room," 
the " clearing house," their faces flushed, their whole person 
excited, their appearance " distorted, hair dishevelled," their 
voices hoarse — ^all intent on making money, not in a legitimate 
way, but by the chance of a rise or fall in gold, bonds, and 
stock. Let us see some of the terms used by them in their 
business. The rings operating in stocks are divided into two 
classes, " bulls " and "bears." They have the advantage of 
the real bear and bull in this — they can change from one to 
the other as the occasion serves. Daniel Drew, Colonel Scott, 
and Commodore Vanderbilt can be bulls to-day, and bears to- 
morrow, as their interests dictate. The object of the bulla is ' 
to advance the price of stocks — that of the bears to depreciate. 
They thrive most when the people generally are in want, or 
when some public calamity unsettles commerce. They often- 
times devise means to bring on a panic that they may break 
the market, and buy favorite stocks at low rates. They do not 
care how much the community may suffer, or how many men 
engaged in legitimate business may be ruined, provided their 
own interests are served. We take from Appleton^B Journal 
a description of some of their terms, and their manner of doing 
business: 

"The terms 4ong' and 'short' are of respective application 
to the * bull ' and ' bear ' parties. The bulls are always ' long ' of 
stock, and the bears are always ' short.' The speculator who has 
stock on hand which he bought with expectation of selling at 
higher prices, is on the bull side, and, in the parlance of the 
street, is * long.' A bear seldom has stock on hand. His busi- 
ness is to sell ' short ' — that is, to sell property which he has 
not got, intending to buy and deliver when prices are lower. 
Generally, the stock is to be delivered the day after it is sold, 
but quite often the bear does not buy it for a month, or two, or 
three months. How, then, can he deliver it in twenty-four 
hours i By borrowing it from another person. There is in 
Wall street a regular system of borrowing stock. The bor- 
rower, who represents the speculator, procures the stock from 
another broker, to whom he gives a check as security for the 
stock borrowed. This transaction is good for one day only, bat 



195 

it may be renewed for the next day, and then the next, and thns 
aeveral weeks may pass before the stock is really purchased 
for delivery. Meantime, the seller, if he belongs to a clique, or 

* pool,' is trying every day to depress prices, in order that he 
may buy the stock at a lower figare than that at which he sold 
it This is the operation known as ' hammering the market,' 
and a very exciting one it sometimes is. But the bears are 
sometimes badly ^ squeezed,' and then they make a rush to 

* cover.' When the bulls learn that there is a large 'short' 
interest in a particular stock, they put their heads together and 
get up a * corner.' When a stock is said to be 'cornered,' the 
meaning is that it is controlled by a clique. The clique hold 
enough of it to control the market, and exact such terms as 
may be desired. An upward movement is suddenly developed, 
and then the bears, who have sold ' short ' in expectation of 
lower prices, become alarmed and begin to buy. In the ma- 
jority of cases, the men wl\o work the advance are the very 
ones who bought what the bears sold, and they are now selling 
it to them at higher figures for delivery back to themselves. 
'Twisting- is the process of making the bears pay high prices 
for what they probably sold at low prices, and ' covering ' is 
the operation of buying stock to ' close ' short contracts. Once 
in a while a stock is so closely *cx)rnered' that it can only be 
borrowed at an enormous interest for a day's use — perhaps at 
a rate that exceeds a thousand per cent, per annum. An ope- 
ration of this sort is the worst squeeze of all ; and it is not to 
be wondered at that, as the gentlemen of the stock exchange 
say, the l)ear8 generally squeal under it. One shrewd manipu- 
lator of stock is known to have cleared $50,000 in one day, by 
loaning a fancy stock that he had 'cornered.' But the same 
gentleman sometimes gets into a 'corner' prepared by others. 
It is commonly undei'stood that he was fleeced to the amount 
of $2,000,000 during the lively 'Northwest' gale a few weeks 
since. ' Puts ' and ' calls ' are terms of more than ordinary 
diflScnlty for the uninitiated to understand. A proposes to 
'put' to B — that is, to deliver to him — a certain amount of a 
certain stock at a certain time, at a price agreed upon when 
the contract is made, and gives B a bonus of one, two, or three 



196 IIONOPOUBS AJSm tHE PEOFLB. 

per cent, as the case may be, for the privilege. This is a ' put.' 
K the stock does not decline in value to an amount exceeding 
the sum given to B, A cannot make anything by the transac- 
tion; and, unless he chooses to deliver the stock, he is not 
obliged to do so. K it falls more than the amount, A makes 
a good profit, for B, having accepted the bonus, is bound to take 
it, even though it may be selling five or ten cents below the 
price at which he agreed to take it. A 'call' is pretty much 
the same thing — with this difference: A gives B a hundred or 
a thousand dollars, or whatever sum may be agreed upon, for 
the privilege of ' calling ' from B a certain amount of stock 
within a given number of days. If it advances, A may * call * 
it, and make money. If it declines, he need not ' call ' it, but 
of course the bonus he gave to B is forfeit. There are times 
when the business in 'puts' and 'calls' is quite large, and a 
great deal of money is made by it; but, like all other kinds of 
speculation, it is dangerous to the inexperienced. ' Scoop ' is 
a tenn less familiar to the public than any of the foregoing. 
This ' scoop game ' is a very common one, and is played in this 
way: A clique of speculators, let us suppose, wish to get pos- 
session of a good deal of some particular stock, which they 
have reason to believe will soon advance in price; but of course 
they want to get it cheap, and they accomplish their object by 
starting a break in the stock. This is done by offering it at 
low figui*es. They instruct their brokers to offer small quanti- 
ties under the market price, and to keep on offering lower and 
lower, until other holders of the same stock, who are not in 
their confidence, become alarmed and sell out at the best price 
they can get. In the meantime, the clique have other brokers 
buying all the stock that is offered, and thus they get posses- 
sion of a large amount of stock at low prices, which they can 
probably sell, a few days later, at a large profit. This * scoop 
game' is one of the most profitable that the Wall street gen- 
tlemen play. The process of ' washing ' — a very good one in 
its ordinary sense — is often employed in Wall street. ' Wash- 
ing' is a peculiar operation there, very peculiar indeed, and the 
outsiders ought to keep as far as possible from the suds. A 
clique is as necessary to it as it is to the ' scoop ' business. 



19T 

There ie a stock on the list, for instance, that the public persist 
in letting alone, and the holders of it want to stir up some 
excitement in this stock, and induce the public to buy it. How 
do they proceed? Their plan is quite simple. Several brokers 
— ^let us suppose four — are employed to 'wash' the stagnant 
stock. No. 1 offers to sell; No. 2 takes what is offered. No. 
3 wants to buy; No. 4 sells him all he wants. This is kept up 
for a few days, the price rising steadily as the * wash ' proceeds; 
but not one share is actually sold. The innocent outsider, 
supposing these fictitious transactions to be real, and thinking 
there is a chance to make a turn in the stock, goes in as a buyer 
himself. Ten to one he will never get as much for the stock 
as he paid, for it falls stagnant when the speculators have got 
it off their hands. ' Coppering ' is a term recently introduced, 
but very well understood in the street. It means operating in 
a direction contrary to that of another. For example, one buys 
a particular stock, believing that it will advance; another man, 
observing that the first has not b^en lucky in his operations, 
sells this particular stock, believing it will decline. Or the 
first may sell a particular stock ' short,' and the second, calcu- 
lating on the other's ill Inck, will buy. This sort of speculation 
is carried on only among the smaller class of operators, and 
may be set down as sheer gambling. A * straddle ' is a double 
privilege, entitling the purchaser to either ' put ' or ' call ' a stock. 
The bonus is generally the amount paid for the single privilege 
of * put ' or ' call.' A * margin ' is the money deposited with the 
broker through whom the stocks are purchased, as a security 
against a sudden depreciation. The amopnt is generally about 
ten per cent, of the par value of the stock. ' Margins ' are the 
rocks on which many adventurers on the uncertain waters of 
speculation are utterly wrecked. ' Carrying ' means holding 
stock in anticl^**ll:n of higher prices. Often a stock is * carried ' 
for six months, but generally the time is not more than two 
months, and frequently not more than a week. Quick turns is 
the rale with a majority of speculators. ' Watering ' is the ope- 
ration of suddenly increasing the capital stock of a company. 
Wall street was thoroughly familiarized with it by the reckless 
Ecie managerB, who earned a notoriety that oerUinly honom- 



198 XOHOPOLZBB AZTD THB FBOFIJB. 

ble men would not covet It is very dangerona to the holders 
of tiie stock previously in the market." 

The foregoing discloses the manner in which these corpora- 
tions, through their managers, play the double role of operat- 
ing railroads and operating in Wall street. To outsiders there 
seems to be but little difference between what is known every- 
where as downright gambling, and Wall street operations. 
The gambler who risks his half-dollar on a game at cards is 
punished for violating the law; but these Wall street opera- 
tions, which are but games of chance, are dignified with the 
name of '' speculations." Honorable men, reputed .Christian 
men — Jew and Gentile — all engage in them. While they 
prey upon the producer in operating their roads, they prey 
upon the unsuspecting public in their stock operations, and, 
by way of variety, occasionally devour each other. Control- 
ling, as they do, the means of transporting the products of the 
country to market, as well as the coin of the country and the 
stock market in Wall street, they are prepared to get up a 
"corner'/ on any marketable commodity — upon the currency 
of the country, and upon gold. In fact they may have all the 
coin of the country under their control, save the amount held 
in the treasury of the government. The monthly reports of 
the secretary of the treasury show that while there was the 
amount of about $100,000,000 in the treasurj^ one year ago, 
there is but about two-thirds of that amount now. The reports 
of sales show that these Wall street operators have cornered 
about one-third of the g(jld held by government within the 
last year. This cornering process goes on, and is now reduced 
to a system. Suppose the secretary sells, in the month of 
January, 1873, in New York, $6,000,000 in coin. It is all 
bought and cornered by the brokers. The importing mer- 
chants require but $3,000,000 during the same month to pay 
duties. The difference, $3,000,000, is locked up in Wall street. 
This transaction, in a greater or less degree, is repeated each 
month, and while the amount of gold in the treasury is 
decreasing that controlled by railroad brokers is increasing. 
The treasury weakens, and these gambling rings and combina- 
tions strengthen. It is only a question of tim^ under the 



199 

present system, when the treasury will be obliged to replenish 
itself by purchases from the brokers. So completely are th^ 
finances of the country under their control, the secretary of the 
treasury is obliged to keep a large surplus of coin on hand to 
meet emergencies. In order to prevent a panic, he is obliged 
to sell coin monthly, and whether the financial condition of the 
treasury or of the country will warrant it or not, he is obliged 
to pay some portion of the national debt as an excuse for 
selling coin, lliese corporate rings are laboring to control 
the gold of the country, and thus prevent the resumption of 
specie payment. To make the resumption impossible, they 
^ bull" gold as well as stock, and thus force gold sales by the 
secretary. The sooner they can deplete the national treasury, 
the sooner can they become masters of the situation. They 
now hold the secretary of the treasury at their mercy, and 
compel him to serve their selfish purposes. When they 
achieve their final victory, (and achieve it they will under the 
present system,) they can, without hindrance, fix the value 
of gold, and extort from the people and the government just 
such premiums as they please to ask for it. They can render 
specie payment impossible, and thus reap the full benefit of 
the " Legal Tender Decision." 



OHAFTEB XXI. 

BOW WALL STREET BTTtLDS BAILBOADS — A HOT-BED OF OOBBimiOK. 

WE have attempted to show the controlling inilnence ot 
these railroad corporations upon the legislative and 
executive departments of the government, and have placed 
before the reader the danger to republican institutions and 
liberties of the people, resulting from this influence. In this 
connection it remains for us to treat of the influence of these 
corporations upon the judiciary of the country. Before pro- 
ceeding to this branch of the subject we desire to direct the 
reader's attention to some alarming facts respecting these 
corporations, hitherto only alluded to, and the disastrous 
results which must follow their present management. 

We have already shown that railroads, in stocks and bonds, 
represent capital to about three times their actual value, and 
that because of this, the people are compelled to pay rates 
of transportation ruinous to the agricultural interest of the 
country. We have shown the relations existing between the 
men who manage these corporations and the Wall street gam- 
blers, with their manner of issuing and putting upon the 
market fictitious or "watered" stock. The idea generally 
prevailing is, that the enormous wealth which these monopo- 
lies represent is real. In fact about two-thirds of it is pure 
fiction. It is manufactured^ and by reckless and dishonest 
men, who stop at nothing, and who care not for the prosperity 
of the nation, or of the government, when their own interests 
are in view. They drain the country of its wealth, concentrate 
it in Wall street, and there spend it in stock and gold gam- 
bling; and this hot- bed of corruption, which has no counterpart 
save in the infernal regions, has raised such a combination 
throughout the country as to control the whole financial 
policy, and compels even the secretary of the treasury to yield 

(800) 



HOW WALT. ffTBXET BUILDS BAILB0AD6. 201 

to its demands. The public and private wealth of the country 
is being rapidly destroyed by these corporations, and all 
departments of government are compelled to do them homage. 
We have shown that the railroads of the pountry are in the 
hands of unscrupulous men, whose sole interest in transporta- 
tion is the money it can extort from the public. This must 
be so from the manner in which roads are built and controlled. 
Formerly railroads were paid for from the proceeds of paid-up 
capital. The men who became stockholders were interested 
in making good and cheap roads, and in operating them 
honestly and economically. These men were free from the 
scandal of watering stock, issuing and selling bonds to an 
unlimited amount, and were not partners in the iniquitous 
Wall-street speculations which have become the bane of the 
country. In Appletoti's Eailroad and Steamboat Companion, 
published in 1849, we find a statement of the cost of railroads 
then constructed. The roads tlien constructed were supplied 
with rails that cost less than those now in use; but the road- 
beds in most cases, in the eastern states, cost much more than 
those constructed at more recent periods. Some of them were 
lines of solid masonry, supporting lateral or string timbers 
throughout the entire length, and the rails were placed upon 
these timbers. Others were constructed upon the plan now 
in use, costing less than half the cost of the others. The roads 
in the eastern states, built upon the plan first named, cost as 
follows: In Massachusetts and the other New England states, 
$24,000 per mile ; in New York, $26,000 ; in New Jersey 
and Pennsylvania, $40,000 ; in Michigan, Ohio, and Indiana, 
where the roads were built upon the modem plan, $11,000. 
Of course, the small cost in these last named states is attribu- 
table in part to the nature of the country through which they 
pass. The facilities for building railroads at the present time 
more than counterbalance the additional cost of iron, and no 
good reason can be shown why the actual cost of roads at this 
time should exceed that of the more substantially constructed 
roads built thirty or forty years ago. But at the present time 
the building of railroads fix)m the proceeds of paid-up stock 
is not generally practiced. A different rule prevails. The 



9QS xosroFOLiES and the ffopls. 

general rule now is to get grants of land, government, state, 
and local subsidies, in amounts sufficient to organize a com- 
pany and commence the work of construction, then to issue 
and sell bonds secured by mortgage upon the roads to be con- 
structed, and from the proceeds construct the roads. Then 
stock certificates representing paid-up capital are issued, when 
in fact all that has been paid is the local subscriptions obtained 
by managers from persons located along the line of roads. 
The roads having been built on borrowed capital, the stock 
reppesents nothing but an opportunity for dishonest specula- 
tion. A " railroad " now means, to a large majority of those 
who are engaged in projecting and creating it, nothing but a 
fraudulent device for extorting money from the public, under 
cover of developing the country and rendering great public 
benefit to the nation. After the roads are built, the men 
who have built the same, and issued and sold the bonds, issue 
to themselves certificates of stock, no i)art of which they have 
paid up, and go into Wall street to unload — that is, to 
sell their stock. If it be in good demand it will bear " water- 
ing." More stock is issued and sold, and by this process men 
who are worth nothing, but who were so fortunate as to get 
the control of certain railroad companies without having 
invested to the amount of a dollar, suddenly become immen^ly 
rich. The value of the road to those who have paid up their 
stock, but are not included in the ring, is destroyed; the road 
is loaded with a debt that destroys its value. This new method 
of construction meets with favor among a large class of men 
in all parts of the country, who have combined to aid each 
other. All that is lacking on their part to take absolute con- 
trol of the whole country and government is a consolidation 
of all the railroads of the country under one management. 
At this time six or eight great combinations, with a half 
dozen men at their head, manage the railroad interest of the 
country. They are extending their power, and it may not be 
long until all will be consolidated in one, which would give 
this monopoly absolute control, not only of the markets, but 
of the whole legislation of the country in matters eflecting 
their interests. ^^ With packed legislatures, state and national, 



HOW WALL fflBEBT BUILDe RAILB0AD6. 90l 

with paid or intimidated judges, and with dvil service of seve- 
ral thousand cunning clerks and able-bodied brakemen, con- 
ductors and switch-tenders, they would b^ in that position 
most to be dreaded by all lovers of liberty — a powerful and 
enormously rich corporation, surrounded by a weak, timid and 
helpless public. While we were still engaged in singing paeans 
over the glorious institutions of our happy country, we would 
suddenly find that our institutions had disappeared, and that 
we had, riveted around our necks, a worse despotism than we 
ever^lamented for the down-trodden of other lands. This is 
really no imaginary picture, as all will see who remember the 
stronghold, absolutely inaccessible to the law, which Fisk and 
Gould erected, and for a time maintained, in New York; or 
the military operations of the employes of the Erie on the 
Susquehanna road, and who have followed with any attention 
the helpless struggles of the government of the United States 
— formerly supposed quite able to take care of itself — in the 
foul toils of the Union Pacific railroad. These corporations 
foreshadow what must follow when a perfect consolidation is 
effected. Now at non - competing points they extort from 
shippers such enormous rates for transportation as absorb 
almost the entire value of the farm products, while from 
points at which there are competing lines of road they wiU 
carry at greatly reduced rates. They will charge no more for 
carrying freight one thousand miles from a point where there 
is a competing road, than for carrying one-tenth of that dis- 
tance where there is no competition. When they have the 
power, and hold the shipper at their mercy, they virtually rob 
him. What is true of their course where there is no compe- 
tition will become the universal rule when a perfect consoli- 
dation of the whole railroad interest is effected. Add to this 
the control of the finances of the country (which they are now 
rapidly securing), and their rule becomes absolute over the 
whole people and all departments of the government If the 
reader has followed us thus far, he will have observed that the 
corporate interest of the country has assumed a position in 
antagonism to the people; that it has a secure hold upon the 



904 . MONOPOLIES AND THE FBOPLB. 

induBtrial and financial interests, and that, to a great extent, it 
alreadj controls the action of the legislative and executive 
departments of the government, state and national. 



CHAPTER XXII. 

THE SUPREME BENOH DTVADED — ITS DECISIONS RKVIJEWJCD. 

WE are aware that many look upon the final decisions 
of courts with a degree of awe and respect which is 
almost reverential. The railroad companies of the country, 
with all their paid attorneys, are now extremely zealous in 
their efforts to convince the public that the supreme court of 
the United States is a body of the greatest jurists the worid 
ever produced ; that their decisions are pre-eminently able, 
and that it is disloyal, if not rank treason, to call them in 
question, or to even criticize them. While we feel bound to 
recognize the decisions of courts as binding until they are 
reversed, we claim that it is not only the right, but the duty, 
of every citizen of the republic to examine these decisions, and 
to approve or condemn, as to his judgment shall seem right. 
We examine, and approve or condemn, acts of congress and 
state legislatures; we discuss the motives of legislators, and 
when acts have been passed which are not acceptable, their 
repeal has been demanded. Not unfrequently repeals have been 
effected soon after their enactment, either because of patent 
defects, or because the people condemned them. History has 
proven that the election of a man to congress, or to the legis- 
lature, does not clothe him with wisdom, not always with hon- 
esty, but that the frailties of humanity affected him as it did 
others. The same rule applies to courts and judges. They 
are made of the same flesh and blood, and are subject to the 
same infirmities as other men. Their knowledge is not per- 
fect ; their judgment is not inlallible, nor are their official 
decisions always pure and free fix)m bias. Instances are not 
wanting where judges have been impeached and removed for 
dishonest practices. They have been and still are being infln- 
enced by popular feeling, by certain interests, and are always 

(205) 



206 HOKOFOLIBB AND THE PEOPLE. 

more or less controlled bj education and association. Their 
decisions are often reversed, and thej sometimes reverse their 
own decisions. 

If we want examples of a corrupt bench, we can refer to the 
city of New York, where certain judges have been impeached, 
and removed from oflSce. Of partisan judges, we find them in 
Louisiana, Alabama, Arkansas, Kansas, and many other states. 
Of ambitious judges, those who, while acting in their official 
capacity, enter into political contests, and use their judicial 
positions to secure other preferment, we need only to look over 
the history of any of these states, and to th^ highest court in 
the nation. Judges of the supreme court of the United States 
are found identified with political parties; entering the lists as 
.candidates for higher distinction; and while they are holding 
high and responsible offices, to which they have been appointed 
for life, they are seen mixing with politicians as partizans, and 
seeking nominations. Judges whose judicial decisions have 
been controlled by public sentiment, can be found in Iowa, 
Illinois, Indiana and Wisconsin. Judges who have reversed 
their own decisions, can be found in any state in the Union, 
and we have recent examples in the supreme court of the 
United States. Such being the facts, it is not strange that 
railroads and other great corporations should, to a very con- 
siderable extent, influence the actions and decisions of courts 
We feel warranted in saying, that the decisions of courts, more 
than everything else combined, have promoted the rapid 
strides made by railroad corporations toward a complete 
destruction of republican institutions. The pernicious prac- 
tice of solving all doubtful points in favor of these corpora- 
tions by the "judicial construction" of statutes, or what 
might be called "judicial legislation," has been of vastly more 
benefit to them than all the grants received from legislative 
bodies. Legislatures do not possess the power to grant to any 
individual, company, or corporation, exclusive rights or privi- 
leges, unless such power is conferred by the constitution. The 
rule formerly obtained that, in cases where the rights of the 
public and that of an individual or corporation came in con- 
flict, an act of the legislature of doubtful authority would be 



THB SUFBEME BEKOH. INVADED. 907 

constrned in favor of the people. The reason for this rule of 
oonstmction is obvious. The people are sovereign. All the 
powers not delegated to the government, or to some depart- 
ment of it, were retained by the people. Hence, when a ques- 
tion was presented involving a doubt of its oonstitutionalily, 
and a decision in favor of the individual or corporation would 
deprive the people of any of their reserved rights, it was 
resolved in favor of the sovereign people. The act was held 
to be unconstitutional because the l^slature could not exceed 
the scope of the authority conferred upon it. The constitution 
was a limitation upon legislation. 

In a former chapter we have attempted to show the distinc- 
tion between the power of the states and general govemmeiit 
under the constitution ; to demonstrate that the power of states 
was supreme in all matters save in those expressly conferred 
upon the general government by the constitution, and that for 
this reason the constitution of the United States should be 
strictly construed. We are warranted in saying that this rule 
obtained until questions involving the interests of railroads 
began to present themselves for the decisions of the supreme 
court of the United States. When these questions began to 
arise, a different rule was demanded by the companies, and by 
a gradual departure the supreme court has reversed this old 
and just rule, and now the will of that court must be treated 
as the supreme law of the land. Judicial legislation has 
usurped the place of judicial investigation, and the people are 
without remedy unless a return can be had to constitutional 
rule. There is now a general complaint throughout the whole 
land, because of the recent interpretation given by the United 
States courts to the constitution; tlieir disregard of statutes, 
constitutions, and decisions of state courts, have reached a 
point which virtually makes the will of the supreme court 
superior to all constitutional and statute law. During the 
war, the power and jurisdiction of the United States courts 
were enlarged, and special powers were conferred upon them 
to meet the exigencies ot the time. From that period to the 
present, these courts, by judicial construction of their power 
under the constitution and new interpretations of that instru- 



S)08 X<»rOFQLIB8 AND THE FBOFLE. 

ment, and by judicial legislation, have gradually extended 
their jnrisdiction, until there seems to be no constitutional or 
1^^ barrier to their decisions. Questions connected with 
railroad companies have increased rapidly. Conflicts have 
arisen between the public and these corporations; they have 
multiplied in the federal courts, and, as a general rule, have 
been decided in favor of the companies. In some instances, 
upon questions arising exclusively under the constitution and 
statutes of a state, the judges of the federal courts have disre- 
garded the action of the people of the state, overridden thdr 
state constitutions and statutes, and pronounced the decisions 
of the state courts invalid, and refused to be bound by them, 
substituting their own conclusions in the interest of these 
monopolies. To prove this let us compare some of the earlier 
decisions of these courts with those of more recf.nt date, citing 
cases where the powers, rights and privileges of corporations 
were involved, and where conflicts arose between the govern- 
ment of states and of the nation. In the early years of our 
republic, questions connected with corporate rights were sub- 
mitted to the supreme court of the United States; they were 
ably argued by the best constitutional lawyers of the nation, 
and were carefully considered and decided by the courts. 
Upon the question as to whether state courts were inferior, the 
supreme court of the United States decided that they were not. 
The same court, on a question raised as to the authority of the 
legislature of a state to grant to private parties exclusive rights 
to certain property in Georgia, held^ that the real party in 
interest was the people, and that it was only when the legisla- 
ture acted within the power conferred, that their acts were 
valid; that it was the peculiar province of the legislature to 
prescribe general rules for the government of society, but not 
to apply those rules to individuals of society. 

The questions as to the rights, powers and privileges of cor- 
porations, came before the supreme court of the United States, 
and was fully examined and decided, in 1819, in what is 
known as the " Dartmouth College Case." The charter for 
the college had been granted by the king of England for educa- 
tional purposes. It was in no sense a corporation for pecuniary 



THE BUFSKMB BENCH mVADED. 209 

profit Without the oonfient of the tmstees of the oollege, 
the l^slatnre of New Hampshire amended the charter in a 
manner not acceptable to the trustees. They refused to 
recognize the change made. A suit was instituted, and the 
case was taken to the supreme court for a decision. The 
point at issue was whether the college was a public or private 
corporation; and, also, as to the extent of the power the state 
legislature possessed over its charter. It is not our purpose 
to examine all the points raised and decided in that case^ but 
only to notice such as refer to the nature of corporations and 
the power of the state governments to control them. In 
deciding these questions, the court seems to have looked at the 
objects for which corporations were intended. The court says: 
^A corporation, being a mere creation of law, it possesses 
only those properties which the charter of its creation confers 
upon it, either expressly or incidental to its very existence. 
These are such as are supposed best calculated to affect the 
object for which it was created. * « * 

"The objects for which 'corporations are created are univer- 
sally such as the government wishes to promote. They are 
deemed beneficial to the country, and this benefit constitutes 
the consideration, and, in most cases, the sole consideration of 
the grant." * * « From the fact, then, that a charter of 
incorporation has been granted, nothing can be implied which 
changes the character of the institution, or transfers to the 
government any new power over it. The character of civil 
institutions does not grow out of their incorporation, but out 
of the manner in which they are founded, and the objects for 
which they are created. The right to change them is not 
founded on their being incorporated, but on their being the 
instruments of government created for its purposes. The 
same institution, created for the same objects, though not 
incorporated, would be public institutions, and, of course, oon- 
tVollable by the legislature. The incorporating act neither 
gives nor prevents this control." 

The doctrine above enunciated fixes the line of distinction 
between public and private corporations. Those created for 
public or governmental purposes are defined to be "public 



SIO MQKOFOLnES AUD THE FBOFLB. 

corporations/' and thoee created for the advancement of private 
enterprises are ^^ private corporations." Private corporations 
possess none of the attributes of sovereignty, and hence are 
to be treated in law as private individuals; the act of incor- 
poration being for the purpose of affording the corporators 
proper facilities for transacting business. Corporations being 
the mere creatures of the law, they possess only those proper- 
tiei which the charters of their creation confer upon them. 
Under the decision to which we have referred, and from which 
we have quoted, corporations are created by statute, and are 
subject to the control of the power creating them. A grant 
from the sovereign power to an individual, or to a company, 
is not necessarily irrepealable, nor will it in all cases be 
treated as a contract. Corporations created for public or gov- 
ernmental purposes are binding as contracts only so far as 
they affect private interests, for the good reason that govern- 
ment cannot contract with itself 

Nor could the l^slature confer exclusive privileges upon a 
corporation, the exercise of which would deprive the people 
of the rights guaranteed to them in the constitution; for the 
reason that the attempt to clothe a corporation with such privi- 
l^es would be an unauthorized act on their part. In the case 
of " Providence Bank vs. Billings & Pittman," decided by the 
same court, in 1830, it is said that " The great object of an 
incorporation is to bestow the character and properties of indi- 
viduality on a collective and changing body of men. This 
capacity is always given to such a body; any privileges which 
may exempt it from the burdens common to individuals do not 
flow necessarily from the charter, but must be expressed in it 
or tliey do not exist." The doctrine obtained that corporations 
can take nothing by implication, and that unless the power to 
regulate and control them has been surrendered by the legisla- 
ture, that power remains undiminished. The rule that grants 
of privileges to corporations are to be strictly construed, when 
the rights of the public are affected, is recognized in this case. 
We are warranted in saying that it is only since corporations 
have become all-powerful in the land that a different rule has 
obtamed. Under the statutes of the United States, and as 



THB SUPREME HENOH DnTADED. 211 

formerly held by the supreme court, a promisflory note given 
by a citizen of a state to another citizen of the same state, but 
transferred to a citizen of another state, could not be sued in 
the United States courts, but the holder was compelled to bring 
his action in the state courts. This rule obtained until coun- 
ties, cities, and towns began to issue their bonds to railroad 
companies, and was then disregarded. Bailroad companies 
had sold and delivered these bonds to parties in Wall street, or 
elsewhere; they had failed to fulfill their contracts with the 
parties from whom they had received the bonds, and when suit 
was brought upon them in the state courts the bondholders 
were beaten. Suits were then commenced in the federal courts, 
the plain letter of the statute was disregarded, the established 
decisions of the supreme courts were overruled, state statutes 
and constitutions were treated with contempt, the decisions of 
the supreme court of a state which had been followed for yeara 
were called " oscillationa^^^ and the interests, frauds,And deceits 
of railroad corporations were fully protected and sustained — 
not because this course was supported by the statutes or prece- 
dents, but because such a course would subserve these harmful 
interests. This action on the part of the supreme court was 
not the result of any dishonest or partisan intent, but it was 
made to prevent what the court was pleased to term "great 
wrongs about to be inflicted on innocent holders of bonds pur- 
chased of railroad companies. In many instances the innocent 
bondholders were the same parties who, as railroad men, had 
cheated the counties and cities, and by fraud and false repre- 
sentation had obtained these bonds, for which no consideration 
has been paid to the present tima It will not be out of place 
here, as showing the influence of these corporations over the 
supreme court of the United States, to refer to the transactions 
that caused the first departure by the court from the settled 
rales of decisions on questions arising under the constitutions 
and statutes of states, and, we may add, initiated a rule of de- 
cisions, followed to the present time, which, have well nigh 
destroyed states rights. Under this new rule the whole coun- 
try is governed by the supreme court and corporations. The 
people are powerless, and monopolies reign supreme. We refer 



312 XONOFOLIEB AND THE PEOPLE. 

to the question of aid by coanties and municipal corporations 
to railroads. In manj of the states municipal corporations 
have subscribed stock and issued their bonds to railroad com- 
panies, in some instances under express statute authority, and 
in others without such authority. No one is prepared to admit 
that compulsory payment by the citizen of a part of his prop- 
erty, or money, to aid a private corporation in building a rail- 
road, is the payment of taxes for the support of government, 
or that the levy and collection of a tax for that purpose can 
be supported by any section of the constitution. Yet we all 
know tiiat such taxes have been and are being levied and col- 
lected. Judge Dillon, in his work on municipal corporations, 
says: "The courts concur, with great unanimity, in holding 
that there is no implied authority in municipal corporations 
to incur debts or borrow money in order to become subscribers 
to the stock of railway companies, and that such power must 
be conferred by express grant. To become stockholders in pri- 
vate corporations is manifestly foreign to purposes intended to 
be subserved by the creation of corporate municipalities, and 
the practice of bestowing powers of this kind is of recent date * 
and origin; and hence the rule, that in order to exist it must 
be specially conferred, and cannot be deduced from the ordi- 
ary municipal grants." 

If the above quotation is good law (and this no one will 
deny), the recent decisions made by the supreme court cannot 
be supported. But in order to avoid the force and effect of 
this principle, and to provide for the collection of bonds ille- 
gally issued (by recent decisions), a new doctrine has been pro- 
mulgated by the court which overturns state statutes, as well 
as the decisions of state courts. Treating of this class of 
bonds, Judge Dillon says: 

" Respecting negotiable bonds issued under legislative author- 
ity, by municipalities for such and kindred purposes, when in 
the hands of honajide holders, the supreme court of the United 
States, influenced, doubtless, by a keen sense of the injustice 
and odium of repudiation, has at all times displayed a strong 
determination effectually to enforce payment. Accordingly it 
has reixLsed to follow the subsequent decisions of the state 



THB SUPSEME BENOH HTVADSD. 213 

coDrts against the validity of such bonds, in casos where the 
prior rulings of the state courts had been in favor of the power 
to issue them; it has adopted liberal constructions of statutes 
and charters authorizing the creation of such debts; it has 
given no favor to defenses based upon mere irregularities in the 
issue of the bonds, or non-compliance with preliminary require- 
ments, not going to the question of the power to contract; and 
has held that the circuit courts of the United States were clothed 
with fall power and authority by mandcmmsj or otherwise, 
to enforce the collection of judgments rendered therein on 
such bonds, and that this authority could not in the least be 
interfered with, either by the legislature or the judiciary of 
the states." It will be seen that for the purpose of relieving 
railroad companies from their liabilities as guarantors, on 
bonds issued to them by municipalities (for these bonds were 
uniformly so guaranteed), the supreme court of the United 
States has declared the statutes of states, and the decisions of 
state courts, absolutely null and void. In violation of both the 
letter and spirit of the constitution, in order to compel the 
payment of bonds issued without authority, and in violation 
of every principle known to the law, it has said that these 
bonds must be paid because they are in the hands of banafde 
holders. 

This same court, as we will hereafter show, when the holders 
of bonds issued by railroad companies were asking payment, 
has released the companies from their written agreement to 
pay in coin, and compelled the holders to take at par depre- 
ciated paper. When the bondholders are demanding payment 
from the people of the bonds issued without authority, the 
court, in order to compel payment, nullifies state government; 
but when these same bondholders demand that railroad com- 
panies shall live up to their written contracts, have decided 
that they need not do so. It fears the stigma of repudiation 
when the pecjple are called upon to pay, but when the call is 
ma ie upon corponitions it decided in favor of repudiation. Our 
author continues: "It has upheld and protected the rights of 
such creditors with a firm hnnd, dUregarding at titnes^ it would 
seem, priaclphs which it applied in other cases^ aiid asserts 



S14 McnKxrauB ahd thb fborlk. 

ike jurisdiction and a/uthority <jf the federal courts toith such 
etrOn/ng energy and vigor as a^pparenUy^ if not actudlh/y to 
trench upon the lawful rights of states and the adhnowledged 
powers of the state trikwnals.^^ 

Mnnicipal oorporationfi have no right to become stockholders 
in private corporations; acts of the legislature pretending to 
confer snch authority are void; the oflScers who control and 
administer the municipal government are the mere agents of 
the municipality, and can only act within the scope of the 
powers conferred upon them by the charter of the municipality 
they represent Neither the constitution of a state, nor of the 
United States, nor the charter of a municipality, can confer 
upon the nation, state, coimty, city or town, the authority to 
compel any citizen against his will to bestow any part of his 
money or property upon private corporations. And it matters 
not whether this comes in shape of a tax, an arbitrary appro- 
priation of a fraction or of all his property or possessions to 
such private corporation, or by a subscription of stock to it 
If the national, state, or municipal government can in either 
of the above methods compel him to aid in building up and 
supporting private corporations, then private corporations are 
clothed with attributes of sovereignty, and all private citizens 
own and possess their property subject to the will of these 
corporations. If a majority of the qualified voters of a state, 
or particular locality, are in favor of taxing the state, or local 
district, to the extent of one-tenth or one-half of the assessed 
value of all property in the district, and investing the amount 
in a railroad enterprise, the minority, notwithstanding their 
protest and remonstrance, must submit to have their property 
taken from them and applied to the same object. Their con- 
stitutional rights are taken from them, and our boasted free 
government has no real existence. By recent decisions of the 
supreme court of the United States, the people of the whole 
country are placed in that position now. Kailroad corpora- 
tions have been, and are now, under the fostering care and 
protection of this court. Statutes have been so often disre- 
garded by it, when their interests were to be subserved, and in 
conflicts between the people and these monopolies the dedsiona 



TAB SDTBXHX BSEIGB DTTAIXBD. 916 

haye been so nniformly in favor of the latter, that it is now a 
question whether the government controls corporations, or cor- 
porations control the government. If a pemidons law ia 
enacted by congress, or a state legislature, it is soon repealed. 
The men who compose those bodies are constantly changing, 
their term of office is short, and the errors committed by them 
can be speedily corrected. The judges of the supreme court 
are appointed for life; the people have no control over them; 
their decisions cannot be reversed by any department of the 
government. A decision of the supreme court is the supreme 
law of the land, and cannot be reversed or amended by aay 
other power in the land. It is superior to all statute law, and 
the power of the court has no limit, save that fixed in the con- 
stitution and statutes of the United States, both of which must 
receive tJiei/r construction and interpretation from the court 
We have already said that judges of this court are subject to 
the infirmities common to all men; that they are liable to be 
influenced by the same causes that influence others; that no 
matter how honest and pure they may be in their intentions 
and actions, their decisions were liable to be controlled by sur- 
rounding circumstances, and that the influence of this great 
corporate power did control them. In proof of this we need 
only look at their course of decisions on municipal bonds, and 
on bonds given by railroad companies, before referred to, as 
well as their decisions upon the nature of railroad corpora- 
tions. It strikes us as remarkable that the supreme court of 
the nation should have or entertain any doubts as to the fact 
that these corporations are private. Upon what principle the 
court can hold that railroads are public highways is not readily 
seen. The stock, the roads, and all other property belonging 
to the different railroad companies, are as much their indi- 
vidual or corporate property as are the furnace, the factory, or 
the mining interests, the property of the companies owning 
them. Their ownership is as complete as that of the private 
person who owns the stage and team used fpr carrying the 
mails in certain districts. The same law that governs other 
common carriers, governs these corporations. Government 
can only interfere with their business when they abuse the 



216 MOirOFOLIIB AND THB FBOFLB. 

privileges granted in their charters. It cannot compel tliem 
to carry the mails, save in pursuance of contracts made with 
them. Thej own the ground upon which their roads are built, 
and no one can travel upon these roads or ship freight over 
thcan, save by the permission of the companies. While courts 
and legislatures have the constitutional right to regulate and 
control these corporations, and, if need be to prevent abuses 
and oppressions, to declare their charters forfeited, as in cases 
of banks, insurance companies, and other corporations, — upon 
no principle of law can they declare them public corporations. 
If it is a fact that they are public corporations, then as a 
resulting consequence they are clothed with the attributes of 
sovereignty, and are a part of the government. If railroads 
are public highways for any purpose, they are for all. Until 
they cease to be owned and controlled by private corporations, 
it will hardly be claimed by any respectable court that they are 
public highways, in the same sense as common public roads, 
nor can they be until they are open to public use. This cannot 
be until the public becomes the owner of these railroads. 

But we are told that the supreme court has decided the 
question, and declared that they are public highways, no matter 
whether they are owned by the state or private companies. 
We have not seen the decision ; but if such decision has been 
made, we are bound to accept it as the law of the land, until 
the same court reverses it. Yet if the court was to decide that 
a river was a railroad, or that a steamboat was a train of cai-s, 
while we would acx^pt this decision as the law, we would not 
admit that such was the fact. We are not aware that the 
question as to whether railroads are public highways has ever 
been before the supreme court, save in the connection with the 
right of municipalities to subscribe stock and issue bonds 
therefor, and upon the question of voting taxes to aid in their 
construction. When these questions have been presented to 
the supreme court of the United States it has held that they 
were public highways. It is noticeable that these decisions 
have been made only when the interests of these corporations 
were to be subserved. In a recent case from Wisconsin the 
supreme court decided that they were public highways, and 



1HX SUFBKICB BBSStCR INT^DXD. 817 

that it was jnst as kwfol to levj taxes for railroads as /or any 
other publio loorka. The same court has decided in a large 
nxunber of cases when suits were instituted on municipal bonds, 
that railroad corporations were private companies, and in all 
of the states where the question has arisen, we believe they 
have been held to be private corporations. We might cite 
several recent decisions of the supreme court to the same effect 
In the cases of Kansas Pacific Eailway Company vs. Prescott, 
Ribon vs. Chicago, Bock Island & Pacific Railway Company, 
Putnam vs. New Albany & Sandusky Eailway Company, and 
Chicago & Quincy Railway Company vs. The County of Otoe, 
tried in Washington last winter, the court virtually decided 
the corporations were private, and not public. The doctrine 
to be gathered from these decisions is, that when the interests 
of these corporations demand it they are to be treated as 
private, but when the question is as to their right to compel the 
people to contribute of their substance to bnild railroads, then 
the roads are public highways. If the corporations are private, 
and the roads are built and owned by them, the fact that these 
roads are private still exists, notwithstanding the courts as to 
the law of the case decide that they are public highways. The 
fact that such a decision has been made, is strong proof of the 
correctness of our position, that the corporations have a con- 
trolling influence over the judiciary of the country more to be 
dreaded by the people than all tiie appliances that can be 
brought to bear upon the legislative and executive department 
of the government. But in no other instance has the influence 
of these corporations over the supreme court of the country 
been made more manifest than in what is known as the '^ legal 
tender " decision. And we might add that no other decision 
of the court, and no act of any department of the government, 
has proved so disastrous to the people as this decision. We 
have already referred to the means used by these corporations 
to secure a majority of the supreme court favorable to their 
designs, and of their success in the selection of judges com- 
mitted to their interests. It only remains for us to review 
this decision to convince the most skeptical of the fact that 
oirporations have captured the supreme court, as well as the 



218 1CONOPOLIE8 Am) THE PBOPIJL 

other departments of the government, and the effect of this 
decision has given to these corporations, and Wall street 
brokers, and gamblers, the absolute control of the finances of 
the country. But before coming to the decision, it will not 
be out of place to remark, that money is always the standard 
of value for all commodities; that the universally adopted idea 
of money means coin — ^gold and silver — or, what is called the 
precious metals. Bank bills, treasury notes, bills of exchange, 
and all kinds of commercial paper are only valuable as the 
representatives of money. The fact that they are expected to 
be converted into money gives them their value in the market. 
Let it be understood that they cannot at some future day be 
collected in money, and their commercial value ceases. In 
proportion to the length of time that must elapse l)efore any 
bank bills, treasury notes, or other commercial paper ciin be 
paid in specie, does its value increase or diminish in commer- 
cial transactions. Nothing but money of the st^ndaixl value 
can be made a legal tender in contracts between individuals. 
Congress does not possess the power, under the constitution, to 
say that A who has contracted to pay B $1,000 in money, can 
discharge that contract by paying him $1,000 in bank bills or 
treasury notes, that are worth in money but $800. If such 
powers exist, then all standard values of property is destroyed, 
and it fluctuates in value as the price of the paper representing 
money approaches to, or recedes from, the money standard. 
The rule that nothing but gold and silver is, or can be, " legal 
tender " has been uniformly adhered to from the formation of 
our government, until 1872, when a majority of the supreme 
court reversed the rule, and decided that what are termed 

4 

treasury notes are, under the acts of congress, legal tender for 
all contracts and business intercourse among men. 

The question was fully argued in 1869, before a full bench, 
then composed of a chief justice and seven associates, five 
of whom concurred in deciding that the act of congress making 
anything but gold and silver a legal tender was unconstitu- 
tional. Before the decision was announced. Justice Grier 
resigned, leaving but six associates on the bench when the 
opinion was delivered Chief Justice Chase delivered the 



THS BUFKEMB BENCH nfYADXD. S19 

opinion, and, in speaking of the powers of congress, says: 
'^ No department of the government has any other pow<er8 than 
those delegated to it by the people. All the legislative power 
granted by the constitution belongs to congress; but it has no 
legislative power which is not thus granted. * * Not every 
act of congress, then, is to be regarded as the supreme law of 
the land, nor is it by every act of congress the judges^ are 
bound. This character, and this force, belongs only to such 
acts as are made in pursuance of the constitution." The court 
then decides that there is in the constitution no grant of legis- 
lative power to make any description of credit currency a legal 
tender in payment of debts, and that it does not exist as inci- 
dental to any of the granted powers. That the power does 
exist in congress to issue bills of credit or treasury notes, but 
not to make them legal tender for debts. The opinion con- 
cludes as follows: "We are obliged to conclude that an act 
making mere promises to pay dollars a legal tender to pay 
debts previously contracted, is not a means appropriate, plainly 
adapted, really calculated to carry into effect any express 
power vested in congress; that such an act is inconsistent 
with the spirit of the constitution, and that it is prohibited by 
the constitution." This decision was not acceptable to corpo- 
rations and railroad managers. It would compel them to live 
up to the contracts they had made, and destroy their power 
of controlling, in connection with the Wall street stockjobbers 
and gold brokers, the entire financial interests of the country. 
We have already shown how this combination of corporate 
interests secured an increase in the number of judges, and that 
Messrs. Strong and Bradley were appointed because of their 
opposition to the legal tender decision. None of the judges 
who had concurred in the decision of Judge Chase had changed 
their opinions; these were then dissenting members of the 
court. The two new appointees uniting with three dissenting 
judges, a majority of the court could overrule the long settled 
decisions of the court, and sustain the act of congress making 
depreciated paper a legal tender. The law of the land, recog- 
nized since the organization of the government, approved by 
all the eminent jurists and statesmen who have lived in the 



no MDBOFOIJB ABD THK ISOfXJL 

last oentnrj, oonld be oTertnrnod; yalnes ooold be miMtUed; 
the financial and oommercial interests of the country ooold be 
made snbject to this great corporate power which had obtained 
snch complete control of the different departments of the 
government 

Soon after the appointment of the two jndges above named 
the legal tender question was again brought before the court 
a full bench of nine judges sitting and participating in the 
decision of the question. Five of the nine concurred in holding 
the legal tender act constitutional, Justice Strong delivering 
the opinion of the court It is a noticable feature of the case 
that a judge who had just taken his seat should be selected to 
px)noance the decision; that after a uniform course of ded- 
•ions, made and upheld by all the great jurists of the country 
for eighty-five years, two judges who had just been appointed 
should be found delivering opinions reversing this long settled 
rule and that both of said judges were appointed because of 
their avowed friendship for the corporations which were to be 
so largely benefited by the reversal of this long settled con- 
straction of the constitution upon the question of legal ten- 
ders, and it seems that even these judges base their decision 
upon what they deem the necessity for a reversal rather than 
upon any constitutional grounds. Justice Strong, as prelimi- 
nary to the opinion of the court, says: "The controlling ques- 
tions in these cases are the following: Are the acts of congress, 
known as the legal tender acts, constitutional when applied to 
contracts made before their passage? and, secondly. Are they 
valid as applicable to debts contracted since their enactment? 
These questions have been elaborately argued, and they have 
received from the court that consideration which their great 
importance demands. It would be diflScult to overestimate 
the consequences which must follow our decisions. They will 
affect the entire business of the country, and take hold of the 
possible continued existence of the government. If it be held 
by this court that congress has no constitutional power, under 
any circumstances, or in any emergency, to make treasury 
notes a legal tender for the payment of all debts, (a power con- 
.ftssedly professed by evwy independent sovereignty other than 



THB SUFBEME BKNCH INVADED 231 

the United States,) the government is without those means of 
self-preservation which, all must admit, may, in certain con- 
tingencies, become indispensable, even if they were not when 
the act of congress now called in question was enacted. It is 
also clear that if we hold the acts invalid as applicable to 
debts incurred, or transactions which have occurred since 
their enactment, our decision must cause, throughout the 
country, great business derangements, wide-spread distress, 
and the rankest injustice. The debts which have been con- 
tracted since February 25th, 1862, constitute, doubtless, by 
far the greatest portion of the existing indebtedness of the 
country. They have been contracted in view of the acts of 
congress declaring treasury notes a legal tender, and in 
reliance of that declaration. Men have bought and sold, 
borrowed and lent, and assumed every variety of obligation, 
contemplating that payment might be made with such notes. 
Indeed, legal tender notes have become the universal measure 
of values. If now, by our decision, it be established that 
their debts and obligations can be discharged only in gold 
coin; if, contrary to the expectations of all parties to these 
contracts, legal tender notes are rendered unavailable, the 
government has become an instrument of the grossest injus- 
tice, and debtors are loaded with an obligation it was never 
intended they should assume. A large percentage is added to 
every debt, and such must become the demand for gold to 
satisfy contracts that ruinous sacrifices, general distress, and 
bankruptcy may be expected. These consequences are too 
obvions to admit of question. And there is no well-founded 
distinction to be made between the constitutional validity 
of an act of congress declaring treasury notes a legal tender 
for debts contracted after its passage, and that of an act 
making them a legal tender for the discharge of all debts, as 
well those incurred before as those made after its enactment. 
There may be a diflference in the effects produced by the acts 
and in the hardship of their operation; but in both cases the 
fxmdamental question, that which tests the validity of the 
legislation, is. Can congress constitutionally give to treasury 
notes the character and qualities of money? Can such notes 



222 MONOPpUEB AND THE PBOPLB. 

be constituted a legitimate circulating medium having a 
defined legal value? If they can, then such notes must be 
available to fulfill all contracts, (not expressed by exception,) 
in money, without reference to the time when the contract 
was made." 

This quotation from the opinion of the court may be taken 
as a sample of the reasoning in favor of a reversal of former 
decisions on the question of legal tender. After elaborate 
argument in the same strain by Justice Strong, and also by 
Justice Bradley, a majority of the court decide that the legal 
tender acts are constitutional, while the four judges remaining 
on the bench, who but a short time before had made a contrary 
decision, dissent from the opinion of the majority. The argu- 
ment of the majority in favor of the decision seems to ignore 
the real question, to wit: the constitutionality of the acts of 
congress, and to place the decision upon the ground that a 
contrary holding would be ruinous to the financial interests 
of the country. The assertion is made that the decision '^ toill 
effect the entire htisiness of the catmtry, and take hold of the 
possible contintted existence of the goverwment?^ The deci- 
sion was made about one year ago, and its effects on the busi- 
ness interests of the country are made manifest. If the court 
believed that the decision sustaining the legal tender acts would 
prove beneficial to the people, it was sadly mistaken. But if 
it believed such a decision would strengthen monopolies and 
enable a few railroad managers and Wall street brokers to cor- 
ner and control the finances of the country, then the decision 
was a success. The effect has been to unsettle the commercial 
, and financial interests of the country, and to show that treasury 
notes, if they are the standard of values, are a fluctuating 
standard. The consequence of the decision has taken " hold 
of the possible continued existence of the governments'^ and 
has enabled the gold and stock gamblers in Wall street to suck 
the life-blood of the nation. The decision gives strength to 
corporations, who, uniting with Wall street brokers, are deplet- 
ing the treasury of the nation to advance their own private 
purposes. By the decision two standards of value are fixed : 
one that is stable, and must ever remain so — the standard of 



THB SUPREME BENCH INVADED. 828 

money — gold and silver ; the other, the standard of fluctuating 
paper, of no intrinsic value, liable to be inflated or depressed, 
as shall best subserve the interests of the parties who, by com- 
bining, have got such absolute control of the market as to be 
able to change the value of this legal tender paper at pleasure. 
Tlie idea advanced in the decision, that to declare that nothing 
but coin could be a legal tender would cause wide-spread ruin, 
presents bat a partial view of this matter. As a matter of 
fact, no act of congress prior to 1862 had ever been passed 
making anything but coin a legal tender; nor was there any 
decision of the supreme court recognizing or deciding that 
paper money could be a legel tender until 1872 ; and yet no 
such wide-spread ruin had overtaken the financial interests of 
the country as has manifested itself since that decision was 
rendered. 

Simultaneous with the decision of the court declaring treas- 
ury notes legal tender, the quantity of coin in the treasury 
began to decrease, and one year's experience has sufficed to 
rednce the amount from one-third to one-half, and in propor- 
tion the amount controlled by Wall street has increased. . The 
secretary of the treasury is now obliged to have recourse to the 
$44,000,000 of treasury notes held as a reserve to prevent panic 
and disaster. This decision does not benefit the importing 
merchant, who must pay in coin; it does not benefit the l^iti- 
mate business of the country; it does not benefit the farmer, 
or any of the industrial interests of the country, because in 
buying and selling, if payments are made in paper {legal ten- 
der), the prices of the articles bought and sold are fixed by a 
gold or coin standard. Coin is, in all dealings, the measure of 
values. The decisiom of the court does not and cannot change 
these facts. The only parties who derive any real benefit from 
it are corporations and brokers, who can save large amounts by 
being released from their contracts. Another argument used 
by the court in favor of the decision is, that every independent 
nation possesses the power to make paper a legal tender, and 
that it must be possessed by our government. The answer to 
this is, that the constitution does not confer upon congress or 
the courts, even by implication, any such power; and if we 



924 MONOPOLIES Ain> THE PEOPLE. 

admit that other nations possess it, we conclude it is becanse 
the fandamental law recognizes it, or because the government 
is of unlimited power. 

The court decides that " legal tender notes ha/oe become the 
vnwerml measure ofvalties.^^ This is simply untrue. In all 
quotations of values the measure is fixed by gold, and then 
legal tender notes are quoted as being worth such per cent 
less, or, what amounts to the same thing, gold is quoted as 
being worth ten, fifteen, twenty or more cents to the dollar 
more than paper; and while the value of gold is fixed, that of 
treasury notes is constantly fluctuating. Under this decision 
railroad companies and their associates, the Wall street gam- 
blers, control the finances, while all the honest and legitimate 
buBiness of the country languishes. Had the court designed 
to place the whole interests of the government and the people 
in the power of these corrupt rings and dishonest brokers, no 
more effectual means could have been devised or adopted. Jus- 
tice Bradley, in his opinion concurring with the opinion of 
Justice Strong, makes use of the following bold and dangerous 
language : ^' It is absolutely essential to independent national 
existence that government should have a firm hold in the two 
great sovereign instrumentalities of the Sword and the Purse^ 
and the right to wield them on occasions of national peril." 
Let this pernicious doctrine be accepted as the law of the land,, 
let the purse and the sword be placed in the hands of govern- 
ment oflScials without restrictions, and what vestige of repub- 
lican institutions is left? What difference is there between 
our government and absolute despotism? But more than this: 
let the highest court of a nation, by a partisan decision, place 
l^e purse of the nation in the hands of a .gigantic monopoly, 
banded together for the purpose of plundering the public, and 
what vestige of independence is left the people? Reader, look 
carefully at the almost unlimited power the corporations of 
the country have obtained over each department of the govern- 
ment; at the legal tender decision and its effect upon the peo- 
ple of the country, and then ask yourself if we, as a nation, 
are not nearing the point where we cease to be a republic save 
in name. This decision impairs the obligation of contractSi 



THE SUFBfiME BEMOH IKVADED. 226 

in violation of the letter and spirit of the constitution. It 
compels the creditor to take from the debtor irredeemable 
pa})er at par, on a contract payable in money. It says that a 
mere promise to pay is a legal tender. It makes it absolutely 
impossible to resume specie payment, because it withdraws all 
coin from circulation, and does away with the necessity for if« 
use in domestic transactions. The coin of the country is 
shipped to foreign countries, to meet demands against us in 
those countries, and to pay for such commodities as we pur- 
chase from them. Credit currency, no matter whether it is 
issued by the general or state government, is not, nor can it, 
under the constitution, be made a legal tender by act of con- 
gress or by a decision of any court in the land, because the laws 
of trade will control the whole matter, being stronger than 
legal enactments or judicial decisions. Money is the universal 
medium or common standard which fixes the value of all other 
things that can be sold or bartered, and neither the congress 
of the nation, by the passage of a law declaring that paper 
shall be a legal tender, nor the supreme court deciding that 
such law is constitutional, can impart an actual value to such 
paper, because it is but a promise to pay money. They can 
no more accomplish this object than can the alchemist convert 
iron into gold. The only effect of this decision, as we have 
attempted to demonstrate, is to place the people more com- 
pletely in the power of corporations. If the reader has fol- 
lowed QSwhe will not fail to perceive that all the departments 
of the government are virtually controlled by the great anti- 
republican corporate interests now overshadowing and cursing 
the land; and that the supreme court of the United States, 
originally intended to be a check upon unconstitutional legis- 
lation, and to guard with jealous care the rights of the people, 
has become an instrument to aid this great power in its war 
upon the rights of the citizen; that by judicial construction 
of statutes involving the rights of corporations and the people, 
such decisions have been made as leave the people but little to 
hope for in the future, and induce the belief that the will of the 
court, and not constitutional law, is to be the " supreme law 
of the land." 



CHAPTER XXIII. 

BANK MONOPOLBTS THEIR CONTROL OF THE CURBENOT. — 

A BANKRUPT FINANCIAL POLICY. 

GOLD and silver are and must remain the standard of val- 
ues.' This being true, any attempt to substitute any 
other standard unsettles values, and opens avenues for reck- 
less speculation. Bank bills, or other promises to pay, are 
and always will remain unsafe as a money standard; especially 
when they cannot be exchanged for specie, save at large dis- 
counts. The policy of the government of substituting treas- 
ury notes for coin, as legal tender, and then issuing national 
currency for general circulation by the banks of the country, 
has been effectual in preventing the circulation of coin, as well 
as the resumption of specie payment. No good reason can be 
given for issuing two kinds of currency, or for providing that 
one kind (treasury notes) shall be legal tender, and the other 
(national currency) shall be of less value, good in ordinary 
circumstances, but which no one is obliged to accept in pay- 
ment of debts. 

Tlie present banking law provides that any iiven^r more 
pe'rsons may form a private corporation or banking association, 
and upon compliance with the provisions of the law, transact 
all business usually transacted by banking associations. As a 
condition to the issuing of bank notes, the company, after it 
has organized according to law, must deposit with the proper 
oflScer in Washington, in government bonds, an amount greater 
by ten per cent, than the amount of bank notes it receives 
for circulation. If it deposit $100,000 in bonds, it receives 
from the comptroller of the currency $90,000 in national cur- 
rency, which it can issue, and, as occasion requires, must 
redeem in treasury notes. The government bonds are held by 
the department as security for the redemption of the bank 



BANK MOLOFOU8T8. 227 

notes received for circulation, and the government pays to the 
different banking companies serai-annnal interest at the rate 
specified in the bonds deposited by the companies respectively. 
The amount of tax annually collected from the people to pay 
this interest to bankers is between $18,000,00^ and $20,000,000. 
All that the people receive in return for this sum is the privi- 
lege of borrowing national currency from banks at legal mtes 
of interest. The banking companies receive from government 
their six per cent, annually in gold on their bonds deposited 
with the department at Washington, and the lawful rates fixed 
by the states respectfully upon loans and discounts with such 
other profits usual among bankers. 

The laws of congress creating the national banking system 
are anti-republican, and at war with the principles of our gov- 
ernment. They restrict the currency of the country to a certain 
fixed amount, and exclude coin from circulation. They 
clothe the secretary of the treasury with absolute control of 
the finances — not only of the government, but of the whole 
people — a power that is unprecedented in republican govern- 
ment, and dangerous to republican institutions. Xo financial 
system could be devised that would so completely deprive the 
people of any control of their finances, or deny to them any 
knowledge of the solvency of the banking institutions of their 
own immediate localities. The system is derived from the old 
world — from monarchical governments where the population 
is dense, the policy of the ruling powers settled, and where the 
aristocratic idea prevails that the few should rule, and the 
many serve; that those who produce the wealth of the country 
should be subject to the idle classes who rule over them. We 
have in this country a moneyed aristocracy, composed mainly 
of men who speculated in their country's misfortunes during 
the late civil war, who, under the pretence of aiding the gov- 
ernment, made their twenty, fifty, and one hundred per cent, 
and amassed lai*ge fortunes by taking advantage of the tide of 
war as it submerged a nation's hopes. At the time the patri- 
otic men of the natioiJlKrere in active service — when such were 
laying down their lives for their country, these men were refus- 
ing to aid the government with money unless they had large 



338 MONOrOLIBB AND THE FBOPLIC 

margins for profit Clothed with this great moneyed power, 
they fixed the price of government bonds, as well as the value 
of all property in the land. As a relief measure, the banking 
law of 1863 was enacted. At the date of the passage of the 
act, more than one-half of the wealth of the country was owned 
and controlled by about four per cent, of the population, who 
have proceeded to dictate all the financial, revenue, and mone- 
tary measures of the government since the breaking out of the 
rebellion, excepting the measure sustaining the credit of the 
government — the issue of treasury notes — a measure which 
alone saved the nation from financial ruin. The banking act, 
while it was passed as a relief measure, was in fact but a sur- 
render of the finances of the country to an irresponsible class 
of banking associations. The amount of treasury notes was 
limited by act of congress, and not being sufiicient to supply 
the wants of the people, about $350,000,000 of currency were 
issued to these private banking corporations, which they now 
control in their own interest. One-half of the circulating me- 
dium is issued directly in government and treasury notes, and 
the other half — currency — by these private bankers. These two 
amounts are all the people can have as a circulating medium. 
By the creation of these private corporations, congress has 
placed over the people a moneyed aristocracy who are responsible 
to the secretary of the treasury, and to whom alone they must 
account. This banking law deprives the people of coin circu- 
lation, and by the assumption of a power at war with Repub- 
lican institutions, creates a privileged class with the aovereig^n 
power of controlling the whole moneyed interest of the country. 
Was there any necessity for this creation of national banks 
with currency differing in character and value from treasury 
notes? The banks were chartered as a war measure. Did 
government or people gain by this banking system? If banks 
were desirable as fiscal agents throughout the country, treasury 
notes were certainly as good a currency as the paper issued to 
banks, and could have been supplied at less cost to the govern- 
ment and the people. As a circulating medium the whole 
people have regarded them as the best possible paper money. 
There was no necessity of this banking system for supplying 



BANK MONOPOU8TB. AM 

a market for government bonds, inasmuch as the largest 
amount of bonds was sold after the banking act was passed — 
not to persons wishing to do a banking business, but to out- 
side parties. Besides, the amount of bonds purchased by 
bankers, and deposited with the comptroller of the currency, 
was comparatively small, being less than one-eighth of the 
national debt. If, instead of selling bonds to bankers, and 
agreeing to pay them coin interest thereon, treasury notes had 
been sold to them, the public would have been just as secure, 
for the fiuth of the government is pledged to redeem these 
notes, and, having received value for them, neither the people 
nor the government would be the losers. On the contrary, a 
great saving — the interest on the amount of the bonds deposited 
would have been saved. In fact all the security for the redemp* 
tion of bank currency is furnished by government. The syst^ 
is based upon the credit of the United States. K this credit is 
good as expressed in the bond, it is also good as expressed in 
the treasury notes. The bankers themselves impart no money 
value to the bank notes; all this is imparted by government 
These bank notes being secured by the credit of the govern- 
ment, and issued by it. They constitute the money of tiie gov- 
ernment, and are a loan to the banks just as much as though 
government had loaned to them treasury notes; and so far as 
the bankers are concerned it is a free loan. The banks do not 
pay interest on the currency loaned to them; on the contrary, 
government pays them interest on the amount they receive. 
To illustrate : Let us suppose that government has sold 
$1,500,000,000 in bonds. These bonds all bear interest at six 
per cent, payable in coin. That is all the consideration paid 
by government for the loan. Under the banking act, $350,- 
000,000 of these bonds are purchased and owned by corpora- 
tions formed for the purpose of doing a banking business. 
They deposit the amount with the comptroller of the currency, 
and receive the full amount, less ten per cent., in currency. 
This currency is issued by the government, and must eventu- 
ally be redeemed by it. The government, in fact, pays back to 
the depositors the amount of their bonds, less ten per cent, 
and at the same time pays interest upon the whole amounti 



980 MONOPOLIES AND THB FBOFLB. 

The bankers have received back ninety per cent, of their de- 
posits, and use the amount received as money; and at the same 
time government pays six per cent, interest to the bankers on 
the ninety per cent, delivered to them in currency. Take a 
single case for a further illustration. A corporation is organ- 
ized in New York for banking purposes — capital, $1,000,000. It 
purchases bonds to the full amount of its capital, and deposits 
them with the comptroller. Upon the whole of this $1,000,000, 
the corporation receives six per cent, interest in coin, payable 
semi-annually, while it continues the banking business, and 
simultaneously with the deposit of its bonds it receives from 
government $900,000 in currency. On this amount it pays no 
interest, and no taxes, excepting the one per cent, exacted from 
all money lenders, brokers, insurance companies, etc It receives 
its six per cent, from government on its banking capital, and 
receives back from government all but ten per cent, of its 
capital, and loans it to the people at six per cent, or more, thus 
getting twelve per cent, onthe amount it has invested in the 
banking business. This tS t im per cent, has all to be paid by 
the people in national taxes, besides the interest paid to the 
banks for loans. If treasury notes had been issued in payment 
for bonds, or for money paid for them, one-half of this per 
cent, would have been saved to the people; and the best kind 
of circulating medium provided by the government would have 
been furnished to them. Banking, without this government 
bounty paid to bankers, has always proved to be profitable. 
Large dividends have been the rule. According to reports 
made by some of the present banking corporations in favored 
localities, they are declaring dividends or ten, twenty, forty, 
and some of them as high as one hundred per cent, per annum. 
This shows that neither the necessities of the government, nor 
of the people, required that a bounty should be paid to bankers 
in order to induce them to take the control of the currency of 
the country. 

It has been said that the banking act was a necessity as a 
war measure. Is this true ? No additional bonds were sold 
because of the passage of the banking act. The amount of 
currency issued and distributed over tJie country did not add 



BAlirX MONOFOLIffTB. 281 

to the wealth of the people or the government The sale of 
bonds and issue of greenbacks answered all the ends of the 
government, unless it was supposed that bj affording a privi- 
leged few among the purchasers of its bonds, the opportunity 
of making a larger per cent, than was allowed to all other 
government creditors, would advance its interests. That the 
object in the passage of the act was not to aid the government, 
or relieve the people from the burdens then resting upon them 
is evident by its peculiar provisions. It limits the amount of 
the circulating medium of the country, and compels the people 
to pay $20,000,000 annually for a currency inferior to treasury 
notes, which they could have had without cost. It confers 
special privileges upon, and pays a bounty to a limited number 
of the government creditors. The amount of currency is too 
limited to benefit the government or the people. It gives to 
the secretary of the treasury, and the banking corporations of 
the country the control of the pv/rse^ not only of the govern- 
ment but of the people. It gives to a few capitalists of the 
country a complete monopoly of the entire business of the 
nation. It has substituted currency for money and made the 
resumption of specie payment dependent upon the pleasure of 
the few men who now control the finances of the country. It is 
the powerful ally of the brokers and stock-jobbers who are 
enriching themselves by oppressing the producers of the 
country. It has fixed an arbitrary limit to the currency of the 
country, and deprived the people of the power of increasing 
that amount, or of using coin as a circulating medium. It is 
anti-republican, and at war with the best interests of the people. 
It has already cost the people in taxes, to pay interest to banking 
corporations on their banking capital, the sum of $200,000,000, 
(which sum is increased $20,000,000 each year,) for which they 
have recived no consideration save the privilege of borrowing 
currency from banks. It establishes a moneyed aristocracy who 
rule over and despoil the wealth-producing classes, reducing 
labor to a state of vassalage to capital. 

We cannot discover the wisdom of the law which provides 
that a banking company shall buy an amount of government 
bonds equal to its capital stock, paying government therefor, 



S89 uasapGLOB Aim thb fboflb. 

and after depositing it with the proper gov^nment ofSdak, 
receive interest on it K a man pay his note or bond, and 
gets it in his own possession, he would lack wisdom if he were 
to continue the payment of semi-annual interest on it after 
that time. Government is doing this with only this difference: 
It says to the banking company: ^^Buy my bonds, pay for 
them, and then I will hold them in trust, and pay you the 
interest on them." We can see no good reason for this pro- 
vision of the law. If the object were to borrow money, it 
could have been accomplished by receiving it directly from the 
banking company, and then issuing to such company legal ten- 
der notes in payment therefor, and by so doing government 
would have saved the large amount of interest now being col- 
lected from the people. If the object were to furnish a circn- 
lating medium, the legal tender treasury notes would have been 
a preferable currency. The government would have hazarded 
nothing, because it would have had possession of the full value 
of the notes or bank bills furnished the company. But if the 
object were to foster and fatten corporations, then the law, as 
passed, has fully accomplished its pui-pose. The law provides 
for a general system of banking, without requiring the bankers 
to keep one dollar of coin for the redemption of their issues. 
It provides for the redemption of currency with currency^ 
thus making the resumption of specie payment impossible, so 
long as legal tender notes are in circulation. It locks up from 
one- tenth to four-tenths of all the capital invested in banking, 
and compels the people to pay interest on this amount without 
receiving any equivalent. It fixes arbitrarily the amount of 
circulating medium for the whole country; the amount being 
$356,000,000 in legal tender notes, and about the same amount 
in national currency; and of this last amount the banks are 
compelled to keep on hand a reserve of from fifteen to twenty- 
five per cent, on all their bills and deposits, thus leaving for 
circulation, throughout the entire country, not more than 
$550,000,000, the whole of which is irredeemable in coin. It 
places the finances of the whole country under the control of 
one man — the secretary of the treasury. The amount of 
currency being fixed by law, and apportioned throughout the 



BANK MONOPOIJ6TO. 233 

oountiy, with no means for ite increase, it is not difficult for 
speculators to withdraw sufficient from circulation to affect 
injuriously the commerce of the country. The combined cor- 
porate interest of the country can, at pleasure, comer such 
amounts as to create a stringency, and if desired, a panic. We 
have shown in a former chapter the combination existing 
between railroad corporations and Wall street brokers, and their 
control of the finances of the country. We have also shown 
the effect of the legal tender decision upon the financial inter- 
ests of the country, and the large benefits the railroad (corpora- 
tions are deriving from it; and that they controlled to a great 
and dangerous extent all departments of the government 
Under the present financial and banking system they hold the 
whole country at their mercy. They fix prices upon all the 
farm products of the country. Having full knowledge of the 
amount of currency in the banks of the great commercial 
centers, as well as the amounts in the different parts of the 
country, with the means in their own hands of controlling and 
expanding these amounts at pleasure, hy withdrawing, or as it 
is termed " cornering " the necessary sura, they fix the price 
of all articles of commerce, and stocks, and gold. The govern- 
ment, under the present financial policy, cannot prevent this 
state of things. It has no reserve with which to aid the 
people. Nor can the banks, if they had the inclination, remedy 
this evil. The business interests of the country require more 
money. The government, as well as the banks, are prohibited 
from issuing more. Because of the lack of quantity required 
by commerce, the banks are, as a general thing, without any 
considerable surplus on hand. When these corporations and 
brokers desire a stringency in the market, they witlidraw from 
the banks a few millions of dollars and lock it up. It is with- 
drawn from the already insufficient amount in circulation, and 
legitimate business languishes. Having their vast corporate 
stock and bond interest to protect, being engaged in constnicting 
railroads, having created large debts upon their roads by reckless 
and dishonest watering of stock and loose issuing of bonds, 
they seek to compel all commercial and industrial pursuits to 
pay tribute to them, and they accomplish this object by con- 



234 MONOPOLIES AND THE PEOPLE. 

trolling the currency of the country. A financial system that 
can be controlled by one interest, or in the interest of one class 
of men, is bad. When, as is now the case, that interest is a 
combination and consolidation of the greatest monopolies that 
ever cursed a country, the system should be changed. 

Under our present system, no matter how evenly the cur- 
rency was originally distributed over the country, the larger 
portion of it finds its way to the great commercial centers. 
The merchant must carry his money to his place of purchase, 
or what is the same thing, buy an eastern draft from his local 
bank, which bank, in order to command eastern exchange, must 
have deposits in eastern banks. The farmer who ships his 
produce to the east, must pay the charges for transportation, 
which are usually collected at its place of destination; and 
these charges being much more than one-half the entire value 
of the shipment, are retained in the east, or if charges are paid 
to local agents, they are forwarded to the principal ofiioe in 
the east. Nearly all the great railroad companies having their 
principal oflices in the large eastern cities, their earnings are 
forwarded to those ofiSees. By these means, the currency of 
the country is concentrated in the larger commercial cities of 
the country, ipainly in New York, where it is in the absolute 
custody of these gi-eat railroad corporations and brokers; and 
the financial and banking system of the country, designed to 
meet the wants of the people, has become, in the hands of 
these giant monopolies, a principal agency in their oppression. 
The produce of the farm, and of the entire industrial pursuits 
of the country, are being swallowed by this huge monopoly, 
and those others created by our tarifl: For this state of things 
there is no relief without a change of policy on the part of the 
government. Already there is a wide margin between coin 
and currency. An increase of the latter would increase that 
margin, and lessen values. With a fixed amount of increase, 
the same interest that now controls the finances would, in a 
short time after its issue, obtain the same control, and this 
would demand another issue; the same process to be repeated 
until our currency would be of little or no value, the unlimited 
increase of irredeemable currency would in the end inflict upon 



BANK MOMOFOLIfiTS. 235 

the oouDtiy absolute min. We are now traveling in that 
direction. Currency is only of value as the representative of 
money. Now (April, 1873) a dollar in paper represents but 
eighty-two cents in money. Our government has adopted 
the Utopian idea of making muill sPri^ of paper^ with 
certain printed promises thereon, legal tender. This kind of 
paper has been decided by the supreme court to be money^ the 
^ measure of values." Notwithstanding the laws of congress 
and the decision of the supreme court, diis measure of values 
will not become or remain stable; it is gradually shrinking, 
while gold, the money of the country, is disappearing. Unfor- 
tunately for us, our strips of paper will not pass for money, or 
l^al tender, with other nations. For this reason, the coin of 
the country has to be used in our commerce vrith foreign 
nations. Within the last year, the amount of coin in this 
country has decreased over $38,000,000. The balance against 
US in our dealings with other countries is the above named 
amount. Unless some course is adopted that will prevent this 
large export of gold, it is only a question of time when we 
shall have no gold in the country, and the only representative 
of values left us will Jt)e paper money without any intrinsic 
value. Under the present financial policy of the government, 
and the unlimited control that corporations and rings, with 
their power all centered in Wall street, have over the finances, 
we need not hope that the agricultural products of the country 
can be transported to the seaboard at rates that will enable us 
to export the same to foreign countries in any considerable 
amount. We cannot pay inland and ocean transportation, and 
compete with other grain-producing countries. The markets 
of the outside world are practically closed against us. With 
our high protective tariffs, extortionate charges for inland 
transportation, lack of ocean commerce, and immense foreign 
debts, public and private, absolute financial ruin must overtake 
us, unless a different policy is adopted. The amount of cur- 
rency being fixed by law, the government has in effect declared 
that t}ie people of this country shall have but this fixed amount 
for all the purposes for which money is used. The effect of 
this arbitrary law, followed and supported by the legal tender 



236 MONOPOLIE8 AND THE PROFIT. 

deciBion of the snpreme court, is to prevent any increase of 
the currency or money. The control of the currency being 
placed in the hands of one man, the whole financial interests 
of the country are dependent upon his will. No matter how 
great the wants of the country may be, or how inadequate the 
supply, no departure is allowed from the inflexible rule as to 
reserves that the banks are required to hold. If the secretary 
of the treasury conclude to sell gold to ease the market, he 
does so; if he decide to issue a half million treasury notes, 
they are allowed to go into the hands of people, and with- 
drawn, when in his judgment, he deems it advisable. His acts 
create a feverish excitement in the money market and derange 
business, carrying loss to everybody, except Wall street brokers. 
That power, so necessary to a despotism, and so destructive to 
republican institutions — the control of the purse of the people, 
and of the government, has fully obtained in this country. 
The whole people of the land are as completely under the control 
of the secretary of the treasury (and he in turn ruled by these 
powerfiil combinations) as a ward is ruled by his guardian. 
The system is bad, and should be changed at once. The gov- 
ernment should control its own finances, and the people should 
be permitted to provide for themselves without asking the 
permission of the government. We subjoin the following 
expression of views of one of the ablest and most experienced 
of the bank officers in this country: 

" The incompetency of special legislation, when applied to 
the adjustment and regulation of the paper currency of the 
country, I presume few sensible men, at all acquainted with 
the subject, will question ; nor is it possible for any man of 
business, or any possessor of property, in whatever shape, to 
feel safe while the power to inflate or contract the currency is 
arrogated by any one man, whether he happens to be some 
narrow-minded, bigoted, obstinate official, acting on his own 
volition, or some subordinate clerk, acted upon by others. 

" No one should be entrusted or tempted with such a power; 
for no man, however able and honest, could, by any possibility, 
justly or accurately exercise it. Foolish as was the experi- 



BANK MONOFOUSTB. 337 

ment^ however, we have tried it: and with the ill sncoess that 
was inevitabla 

f*The sway to and fro of our currency, controlled by the 
ebb and flow of our buBiness transactions, consequent upon 
seed time and harvest, is subject to law 'as imperious and 
immutable as any that governs either the physical or moral 
world; and in just the degree that we understand and conform 
to its action can we hope for a successful solution of the 
prot>lem that now so vexes the minds and disturbs the interests 
of all classes of the community. 

^ The nearest approximation we have yet made to such an 
understanding and conformity has been in the New York free 
banking law, from which the national currency act has bor- 
rowed all of any merit it possesses. 

"This New York law, free from the vice of monopoly which 
the national currency act inherits from the necessities of its 
birth, and open to all men, as any honorable pursuit should be 
in this republic of ours, is also distinguished by three salient 
points: perfect security to bill-holders, freedom from arbitrary 
reserves, and systematic redemption of bills. In this last 
feature of the law, disagreeable as it is at times to speculation 
or unwary bankers, lies the key to its success, checking and 
governing as it does by its conservative action all over-issues, 
while still leaving the open freedom of the system untouched 
by any useless restriction ; so that, no matter how great the 
number of those who choose to embark in the business, no 
more currency can be kept afloat than the wants of the country 
demand. The national currency act fails because it is a 
monopoly; because it has only a nominal redemption; and 
because of its arbitrary reserve clause, which serves only to 
hamper the means and obstruct the usefulness of our metro 
politan banks at the very time when the trade of the country 
most requires their services, to say nothing of the power for 
evil which a knowledge of this flxed limit gives to the gam- 
blers and speculators who hang around and within our stock- 
exchanges; and, lastly, because it has no power of expansion 
and contraction in response to the varying calls of trade and 
commerce. 



238 ICONOFOIJIS AND THE FBOPLB. 

" The BubBtitution of a free banking law for the national 
currency act — in the mere fact of the release it would give us 
from constant petitions to Washington officials, leaving the 
government to attend to its own monetary affairs and strictly 
mind its own business — would go a great way towards restor- 
ing and maintaining the manhood and self-respect we are fast 
losing, from our constant looking up to and attendance upon 
the central power, asking to have done for us things which 
should be self-regulating or which we should do for ourselves. 
Democrats as we profess to be, we are rapidly aping the follies 
and acquiring the habits of dependence upon authority charac- 
teristic of the older civilizations of monarchial Europe. It is 
hardly time, I think, for us to take the backward swing of the 
pendulum of political progress, that is sure eventually to land 
us where we began." 

A careful examination of the financial policy of the govern- 
ment ought to convince us that a change is necessary to 
prevent ultimate ruin and bankruptcy. With gold driven 
from circulation — an insufficient amount of depreciated cur- 
rency for the transaction of the business of the country, and 
the facilities afforded the monopolies for controlling our whole 
commerce, the agricultural and industrial interes.ts of the 
country languish — the farmer receives no reward for his toil — 
the laborer is poorly paid — and general prostration extends 
over tlie land. A return to specie payment, or an increase of 
sound currency, would relieve all cause of complaint, and 
enable the industry of the country to receive a fair remunera- 
tion for its labor. 



CHAPTER XXIV. 

0T7B TABIVT' FOLIOT — DOES FBOTBCfllON FROHBOT t 

A DIVERSITY of opinion exists throughout the country 
upon the question of tariff. Politicians, statesmen, and 
the people generally, differ as to the policy the government 
should adopt respecting it. It is generally admitted that the 
revenue for the support of the government should be derived 
from duties levied upon imports. The real point upon which 
a difference exists is, whether the government should levy a 
tariff for revenue alone, or whether it should be levied for the 
purpose of affording what is termed a protection to American 
manufactures and interests. This question is no nearer a 
solution now than it was forty years ago. Those who favor 
protection appeal to our national pride ; the necessity of 
encouraging home manufactures, and of competing with the 
cheap labor of Europe. A tariff for protection has been urged 
and adopted as the only means of fostering home productions 
for so long a time that it is deemed one of the necessities of 
the country by its advocates. They look upon it as a chief 
means of affording a home market for the farm produce of the 
country, as well as affording a market for all manufactured 
articles. Wliile, on the other hand, those who are opposed to 
a tariff save for revenue, claim that what is termed protection, 
is, in fact, oppression; that it cripples commerce, taxes the 
people oppressively and unjustly, and, instead of benefiting 
the producer by affording him a market, deprives him of it 
They insist that the agriculturists of this country need, and 
must have, the advantage of foreign market in order to make 
farm pursuits remunerative. 

We have been combating monopolies, and shall attempt to 
show that what is termed a protection tariff affords no protec- 
tion to the people at large, or to the operatives and laborers in 



240 MONOFOIJE8 AND THE PEOPLE. 

factories and shops, but only to tHe capitalists of the conntry. 
An equitable tax for revenue is one that is levied upon articles 
of foreign growth or production, that enter into general con- 
sumption; and not one that is levied upon articles the main 
portion of which are of home manufacture. It is only the 
imported article that pays a duty to the government The 
home manufacturer does not sell his fabrics for less price than 
is paid for the imported articles of like character and value; 
hence when only a part of any commodity is imported and 
pays a duty, and the other part is supplied from home mann- 
fiustures, while the government derives revenue from the 
imported articles, the manufacturer puts into his own pocket 
the same per cent, that is paid to the govemmient in shape of 
import duty. To make it plainer: If a tariff of forty per cent 
is paid upon the imported article, when it is sold, the pur- 
chaser must re-pay this per cent, to the importer, but the man- 
ufacturer can advance the price of his goods so as to realize forty 
per cent, or the amount of the tariff over his former prices, and 
still compete with the importer. The tariff protects him at 
the rate of forty per cent, which must be eventually paid by 
the consumer. No tariff is paid on home manufactures, and 
yet, in all cases, the manufacturer adds to the cost of produc- 
tion the amount of the tariff placed on like articles, and 
collects it from the purchaser or consumer. A tariff for pro- 
tection gives to the manufacturers a monopoly, in some cases 
so complete as to drive the foreign article from our ports. In 
such casetf the government receives no revenue, but the manu- 
facturer makes a clean profit of the per cent, fixed by the tariff, 
all of which is evenhially paid by the consumer, and for which 
he receives no consideration. To illustrate this, let us take the 
duties on blankets for the year 1871, and the quantity imported. 
Tlie duties on the four classes of blankets were 87, 88, 100, 
and 109 per cent, respectively. Tlie whole imports for that 
year amounted to $19,355, and the tariff duties amounted to 
$17,316. All of the residue of blankets purchased during that 
year were home productions. Tlie manufacturer has only to 
mark up his price to realize about one hundred per cent over 
the price at which they would have been sold but for the pro- 



OUB TARIFF POUOY — ^DOBS PBOTTBCniON PROTEOT? 341 

tection tariff. Take boots and shoes as another illustration: 
We imported none in 1871, and of course no revenue was 
received on these articles in that year; yet the manufacturers 
had the benefit of a tariff of thirty-five per cent, on each pair 
sold. If a pair of boots was sold at $8.00, the protection the 
wearer paid the manufacturer was $2.80. The law compels the 
farmer and laborer to pay that sura as a bounty to the manu- 
£Eicturer. On cotton goods the consumer pays a duty of from 
thirty-five to sixty-three per cent For almost every article of 
clothing worn by man, woman and child a duty must be paid. 
The average is about forty-five per cent on the value. Prices 
are nearly uniform for the same classes jof goods, whether of 
foreign or domestic manufacture. On imported articles the 
tariff is paid to the government ; on domestic manufactures 
the duty is paid to the manufacturer. This system compels 
the poor man to contribute more than his fSir proportion to 
protect the already rich manufacturer. To illustrate this, let 
us suppose that A is worth $500,000, and has a family of four 
to clothe, while B, who has nothing but his industry, and per- 
haps a small homestead, has a family of eight dependent upon 
him (as a general rule the poor man has the larger family). 
Both families must be clothed and fed ; each must contribute 
to the manufacturer the same rate of protection. The man 
with his half million in property and family of four will prob- 
ably purchase as much for his family as the poor man will for 
his family of eight ; each expends for his family, during the 
year,- for clothing, say four hundred dollars. If the duty on 
tha purchase averages forty per cent, each pays for the sup- 
port of the government and to protect home manufactures the 
sum of $160.00. The sweat and toil of the poor man contrib- 
utes just as much as the rich man's half-million. Or, suppose 
A is a man without family, and has great wealth, and B is 
dependent upon the product of a small farm for the support 
of himself and family. A spends for clothing $200.00, while 
B is obliged to expend $400.00 for clothing his family. Here 
the labor of the poor man pays twice as much as the capital 
of the rich man to protect home industry and support the 
government 
16 



242 MONOPOLIES AND THE FBOFLB. 

The above illustrations will serve for all articles of general 
consumption. Let us look at the effect of the tariff upon 
other articles, taking railroad iron as an illustration. Under a 
revenue tariff railroad iron was sold for less than two-thirds 
of its present cost. Manufacturers amassed princely fortunes; 
labor^^ were better paid than they are now; the iron interests 
8ee^led to be in a prosperous condition ; the demand was 
growing and increasing, and has continued to increase, until 
the supply is insufficient, and both foreign and domestic mar- 
kets are depleted, and at times exhausted. With this increas- 
ing demand and scant supply there seems to be no good reason 
for government protection to home manufactures, yet a pro- 
tective duty of about one-fourth its value is allowed on rail- 
road iron. While the companies constructing the roads pay 
this duty, the producing classes also pay it in the end, in the 
shape of appreciated charges for transportation. The protec- 
tion afforded to manufacturers does not ejctend to the laborers 
and operatives. The slight increase on the amount paid them 
does not meet the increased cost of living resulting from the 
protection tariff. They must pay more for what they consume, 
as well as receive the pay for their labor in depreciated cur- 
rency. Tlie effect of protecting the iron interests is to 
strengthen a monopoly that is now so rich and powerful that it 
controls some of the largest states in the union. For this pro- 
tection it returns no equivalent. Tlie effect is the same in otlier 
manufacturing states. The owners of the factories make large 
profits, but the laborers and operatives, while their wages have 
advanced, really do not receive as much, over and above the 
increased cost of what they consume, as they received prior to 
1860, under a revenue tariff. 

The purchasing power of a dollar l>efore 1860 was as great as 
that of one and a half dollars now, for the reason that then it 
was the value of a coin dollar, while at the present time it is 
the value of an irredeemable paper dollar, at no time worth a 
dollar in coin, and for the further reason that the present tariff 
compels labor to pay for its purchases from thirty to eighty per 
cent for protection to the manufacturer. Tims, while the actual 
increase of wages is, as shown by reports made after investiga- 



OUB TARIFF POUCfY — ^DOBB FBOTBOnON PROTBOT? 243 

tion, but twelve per cent., the cost of living has increased fifty 
per cent Under the plea of encouraging home manufactures, 
the operative and laborer is compelled to work at starvation 
prices, and it is not strange that thej are organizing mutual 
aid societies. 

Another argument in favor of protection, which is often 
urged, is that we should protect our people from the com- 
peting effects of the pauper labor of Europe. If this object 
were accomplished by a protective tariff, one good purpose 
would be achieved. But what are the facts? The manufac- 
turers avail themselves of the higher prices warranted under 
the tariff, and then import their laborers and operatives from 
Europe; and, instead of finding, as formerly, American facto- 
ries, furnaces, and machine shops operated by Americans, they 
are worked mainly by imported laborers and operatives, and 
those who were to be protected and receive living wages are 
compelled to seek employment in other pursuits. Instead of 
protecting our own laborers from the competition of foreign 
pauper labor, the foreign laborers are imported, and supersede 
those who were promised protection. 

Another argument in favor of a protective tariff is, that it 
¥rill afford a home market for the agricultural products of the 
country. Is this true? The vast agricultural resources of the 
great west and south demand the markets of the world. Illi- 
nois and Iowa can produce enough to supply a manufacturing 
population, who, in turn, could supply all the fabrics and 
manufactured articles demanded by the entire population of 
the whole country. If we are to have the balance nicely 
drawn, so as to have a manufacturing population suflicient to 
consume the agricultural products of the country, then we 
could furnish the manufactured articles at rates that will 
allow us to export to other countries, and compete with them 
in their own markets, or else the supply will so far exceed the 
demand that only a limited number could continue manufac- 
turing pursuits, and a protective tariff, no matter how high, 
could not furnish a market beyond the demand. Let us refer 
to the returns made to the state department for an illustration 
of one point : In 1860 the exports of manufactured articles 



244 MONOFOLIES ASD THE PEOPLE. 

to foreign conntries, under a revenue tariff, anion nted to 
$21,851,562. Tlie total amount of like exports in 1871, under 
the present protective tariflT, amounted to $13,038,753, in coin. 
The exports in 1860 were in excess of those of 1871, under 
the highest tariff ever known in this country, $8,282,811, 
showing that under a low or revenue tariff our manufacturers 
could and did sell in foreign markets more than under the 
present system of high duties. Again, if we look at the exports 
of meat and breadstuffs for the years 1860 and 1871, we will 
find the amount exported in 1860 exceeded and exported in 

1871 $2,000,000. We have not the figures before us, but 
believe they will show a still greater falling off in 1872. Now 
let us look at the imports during the same period. In 1860 we 
imported manufactured articles to the amount of $146,177,136, 
and in 1871 to the amount of $165,463,679, being an excess 
of the amount for the year 1860 in the sum of $19,286,543. 
If we add to this the falling off in exports ($2,000,000), the 
balance of trade against us, on manufactured articles, as be- 
tween us and other nations, is $21,286,543. The imports for 

1872 far exceed those of 1871, and the balance of trade against 
us for that year was but little less than $40,000,000. But if 
we take our entire commerce with other nations in account, 
the balance against us in 1871 was over $100,000,000 ! In 
1872 it was over $140,000,000; and if we add tlic amount of 
interest paid annually on bonds held in other countries, 
payable by railroads and other corporations, and the general 
government, the balance against us in 1872 was not less than 
$250,000,000. This balance must be paid with the product? 
of our country or in money. We have not coin with which to 
pay, and under our protection system we cannot pay with onr 
products. A protective tariff makes the farmers, the laborers, 
and all consumers insurers of a certain profit to the already 
powerful combination of manufacturers. Wliile the mechanic 
must depend upon the demand there is for his skill and labor, 
the laborer must also take his chances in the same way, and 
be content to accept such wages as his services will command; 
and the farmer must depend upon the demand and supply for 
the sale of his farm product, and not unfrequently will sell at 



OUB TARIFF POLICY — DOBS PBOTECmON PROTBCt! 246 

ruinous prices, while the manufacturers have a monopoly in 
their line — they can always sell at a profit; all they need to do 
is to sell about as cheaply as the same article can be furnished 
for from a foreign marker, plus the " protection " of the duty. 
The duty paid on the foreign article is the amount of royalty 
the manufacturer charges for his goods. All other industries 
are compelled to divide their labor and products with him. 
The laborer who receives $20.00 per month and buys cloth of 
domestic manufacture for a suit of clothes, for which he pays 
$20.00, contributes about $7.35 of that amount to " protect " 
the manufacturer. Tlie farmer who sells one hundred bushels 
of wheat for $100.00, and expends the amount in clothing for 
himself and family, donates about $38.00 to protect the manu- 
facturer. Tlic same is true of all other classes of consumers. 
Each one pays from thirty to eighty per cent, on his purchases 
to protect the owners of factories, furnaces, etc. 

The protective tariff has destroyed our ocean commerce. It 
would not be profitable to spend time in reviewing the duty 
levied upon the materials and in the construction of vessels 
for ocean commerce. The fact is well known that our carry- 
ing has passed into the hands of other nations. That vessels 
can be built more cheaply in foreign ports is well known, as 
also that American ship owners build or purchase their ships 
in Europe, sail under English colors, and use English papers, 
assigning ae a reason therefor their inability to pay the duty 
upon the materials used in ship building. So oppressive is 
this duty, and so damaging has it become to our commerce, that 
congress is being urged to grant subsidies to ship owners. As 
a necessary result of this system of protective tarifi^, the Amer- 
ican built ships cannot carry freight as cheaply as those built 
in foreign countries, and the producer must be content to have 
his produce, already taxed to a half or two-thirds its value for 
inland transportation, taxed beyond the amounts charged by 
the vessels of other nations for ocean transportation, or allow 
the ocean trade to remain as it now is, in the hands of Eng- 
land. American seamen must abandon the ocean, or sail 
under foreign flags. Protection has destroyed our mercantile 
navy, and compelled our seamen to seek employment else- 



M6 xonoffoim ahd the fbdfle. 



irlieirey and in other ooeapations. With onr vast agiicnltiiral 
wealth demanding the markets of the world, the protective 
poUoj of the govomment eflbctnally cloBee our porta to other 
nationa, while the farmer is obliged to acoept for hia grain the 
low price that a home market, already glutted, will aSbrd him. 
Tbe protective tariff is draining the country of coin, and mak- 
ing it impoasible to reeume specie payment Taking it in con- 
nection with the combination of corporations, and Wall street 
brokers, the prospect of having coin as a drcnlating medium 
is bat fidnt, if it is ever possible. 

The products of our mines for the year 1872 were about 
$6S,000,000, and for the last four years have been nearly 
$900,000,000. The value of petroleum produced in the United 
States for the year 1872 was not less than $60,000,000, a large 
portion of which was shipped to and sold in foreign countries, 
and to that extent should be reckoned as money in our dealing 
with foreign nations. In 1872 the balance of trade 'was 
against us to the amount of about $250,000,000. After ab- 
sorbing the produce of our mines, and our petroleum, the net 
balance against us was not less than $120,000,000. This bal- 
ance had to be paid in coin or in the issue of new bonds. At 
no time since the enactment of the present tariff has the bal- 
ance of trade been in our favor. Thus, notwithstanding the 
high duty paid, and the protection afforded by the tariff, our 
demands for foreign manufactures increase to such an extent 
as to threaten the nation with bankruptcy. According to 
official reports, the amount of coin in the country in 1868 was 
$350,000,000. The products of the mines since that date 
amount to $200,000,000. The amount of coin now in the 
country is reported less than $250,000,000, and most likely 
will not amount to $200,000,000. Protection to a small band 
of monopolists has caused an annual decrease in the amount 
of coin in the country equal to the excess of imports over ex- 
ports. A few owners of factories and furnaces are being ben- 
efited and enriched by protection; the prices of manufactured 
articles have increased on an average about fifty per cent The 
wages of operatives and laborers have increased but twelve 
per cent; the exports of manufactured articles have decreased; 



OUB TASIFF POLICY — DOES FBOTBOTION PBOTBCrr) 247 

the value of imports hae increased ; the ocean commerce of 
the nation has been destroyed; the prices of the agricultural 
products of the country are reduced to a point that has blasted 
the prospects of the farmer, and made it difficult for him to 
Ifve; the country is being drained of its precious metals, and 
an irredeemable currency has become the only circulating 
medium ; values are unsettled, and the country is threatened 
with financial ruin — ^all to affi>rd protection to home manu- 
£Eicturer8 and corporations. Protection is but another name 
for the systematic plunder of the farmer, laborer, and all the 
industrial interests of the country, by a class of monopolists 
that should be classed with corporations, stock jobbers, and 
Wall street brokers, and who are, in part at least, composed 
of the same men who control the corporate interests of the 
country. 



OHAPTEK XXV. 

FAXENT BIOHTB AND TUEIK ABUSES. 

CLOSELY allied to the monopolists of which we have been 
treating is that of patents to inventors. The original 
idea of granting patents was to protect inventors and dis- 
coverers when their inventions and discoveries were riew and 
vsefvl. It is bnt just that the person who invents or discovers 
a new and useful principle in arts or mechanics, or makes a 
new and useful combination of principles not new, should be 
protected in his discoveries; that for a limited time he should 
reap the exclusive benefit of his discovery, in order that he 
may receive a fair consideration for the benefit his fellow-men 
are to derive from his studies and enterprise. 

To these inventors and discoverers we are indebted for 
much that is of great value to the public. The arts, sciences, 
and mechanics, as well as agriculture, have l)eeu greatly bene- 
fited by discoveries and inventions. The wealtli, comfort, and 
happiness of the nation liave l)een increased, while the invent- 
ors, because of the protection afforded tlieni, have received u 
fair remuneration. Tlie fact that valuable inventions reward 
the inventor liberally has led to great and growing abuses of 
the patent right statutes, and to great frauds and impositions. 
The desire to acquire sudden wealth has caused dishonest ad- 
venturers to enter the field of invention and discovery, with 
the intent of defrauding the people, as well as deceiving the 
patent office department. The same desire has caused those 
whose inventions are of value to resort to various schemes 
and subterfuges to continue their exclusive right to manufac- 
ture and sell their inventions long after they have been fully 
compensated for all they have expended in thought, time, and 
labor, in arranging and perfecting tlieir discoveries and inven- 
tions. Having been granted a monopoly, they contrive to 

(248) 



PATENT RIGHTS AND THKIB ABUSES. 349 

continue it Lobbyiste and congressmen become interested 
' for a consideration, and patents are renewed from time to time 
by an abuse of the law that was designed to encourage discov- 
eries and inventions, but not to build up and continue oppres- 
sions of the people. 

No class of the communijty has suffered as much from these 
monopolies as the agriculturalists. All improvements in farm- 
ing implements and machinery are patented. Some of them, 
patented more than a quarter of a century ago, are still under 
the exclusive control of the patentees. Beapers that cost the 
manufacturer but fifty or sixty dollars are sold for from one 
hundred and seventy-five to two hundred and twenty-five 
dollars, because the patentee, or his assigns have now, and for 
nearly a generation have had, an exclmsive right to make and 
sell them. So with seeders, plows, harrows, fanning mills, and 
almost all farming implements. The farmer is obliged to pay at 
least one hundred per cent, royalty to the inventor, or his as- 
signs, before he can receive any benefit from a discovery or an 
invention designed especially for his use. The inventors have 
already realized princely fortunes from their inventions, and 
the intent of the law has been fully accomplished; yet the 
patents are continued, and no one is allowed to make or sell 
these implements without th^ permission of the inyentor. The 
law, which gave an exclusive right for fourteen years, has been 
amended from time to time; the rights have been extended 
until patentees and their assigns annually claim tribute from 
the farmer in an amount that is oppressive. Patent right men 
operate together; they combine for the purpose of extorting 
from the people of this country, where they have a monopoly, 
while at the same time they sell their manufactured articles 
in foreign markets for one-half the price they demand in this 
country. We might illustrate this by numerous facts, but will 
content ourselves with reference to sewing machines and reap- 
ers. These are all patented, and all have patents for improve- 
ments made from time to time, many of which improvements 
are of little or no value, save as a pretext for the renewal of 
the patent. A sewing machine that cannot be purchased in 
the United States for less than seventy dollars costs but twelve \ 



260 • MONOPOLIES AND THE PEOPLE. 

or thirteen dollars for work and uiaterials. This same machine 
(Singer's) is shipped to Europe and sold for $32.00. Here, 
where the patentee has an exclusive monopoly, we pay $38.00 
more for ike machine than it costs in England. We could 
order an American-made sewing machine from Belfast, pay 
freight and charges twice across the ocean, and get it for one- 
half it costs to buy it in America. If you purchase a McCor- 
mick's reaper in this country it will cost you about $200.00. 
Yon can order the same machine from England, pay freights 
for its passage twice across the Atlantic, and get it for about 
one-half the money. The manufacturer cannot sell in this 
country without paying about one hundred per cent, royalty to 
the inventor, but he can ship to Europe and sell at one-half the 
price charged in this country, and realize a fair profit on the 
sale. When a farmer purchases a reaper for himself, and a 
sewing machine for his wife, paying for the two $270.00, he 
pays as royalty to the inventor, $135.00. This same rate has 
been paid for the last twenty-five or thirty years. This large 
royalty is paid to the inventor and is called protection. Con- 
tinued beyond a reasonable time, it is nothing but legalized 
robbery. 

The fact that large fortunes have been, and are, made by 
inventors and pretended inventors, has filled the country with 
sharpers and swindlers, who are constantly on the lookout for 
an idea that may lead to some sort of invention upon which 
they can apply for a patent. The ease with which patents can 
be obtained encourages them in their undertaking. If we are 
to judge of the ability and competency of the examiners ol 
models and drafts by the patents issued for almost all con- 
ceivable articles, we must conclude that the only qualifications 
they possess are to receive the fees, and recommend the issuing 
of letters patent. Principles so old that the date of their dis- 
covery is lost, that have been in use so long "that the memory 
of man runneth not to the contrary," are being monopolized 
by letters patent, until a mechanic, or farmer, if he puts a 
. ^ndle in a hatchet, a hoe, or rake, or changes the arrange- 
mc. '' of a harrow, plow, churn, or washboard, must expect to 
have •» sharp speculator call upon him for royalty for an 



PATENT RIOHTS AND THEIB ABUSES. « 251 

infringement upon his patent. Or, if a seamstress cuts her 
thread in a particular way she must pay royalty. If the farmer 
makes a glove to protect his hands in husking com, before he 
has used them a half hour, some vender of patents will call 
upon him for royalty. If the owner of a house attempts to 
paint it, or repair the roof, he must pay royalty for the privi- 
lege, if his own judgment should prompt him to compound his 
paints with some article not ordinarily used, or to use tor his 
roof a kind of composition not in general use. 

The increase in the business of procuring patents is now so 
great that it has become a general and common nuisance to the 
whole country. The following is a list of one week's business 
in the patent office: 

Patents were issued in one week to applicants from the 
western states for threading nuts; broom com duster; thresh- 
ing machine; school desk and seat; station indicator; binding 
screw; corn sheller ; windmill; photograph skylight; com 
husking thimble; land pulverizer; manufacture of sweet bis- 
cuit; railroad frog; dress pattern; two for plows; thread cutter 
for sewing machine; com husking glove; wheel plow; bridle 
bit; railroad track wrench; cradle; paper file; garden hose 
holder; sawing machine; saw swage; scythe rifle; butter pack- 
age; Kpring hinge; swage for forming horse shoes; automatic 
grain weigher; fire-place grate; potato digger; automatic gate; 
faucet; stock for mill-stone picks; piston valve for steam 
engine; car coupling; motive power; grain basket; dining 
table; portable fence; fishing torch; extension table; driving 
gear for hand ear; horse collar; harrow; cross-cut saw handle; 
extension ladder; machine for cutting leather; bee hive; cloth 
measuring register; cutter for tonguing and grooving lumber; 
heating stove; rotary steam engine; manufacture of steel; 
blast furnace; compound for preventing incrustation; fruit 
press; fire extinguisher; two for cultivators; hub for heavy 
wheeled vehicles; horse-shoe attachment;^ egg CArrier; hose 
pipe nozzle; cotton cultivator; shoe pegging and trimming 
machine; combined seed separator and drill; felloe; filter for 
com -juice, oils, etc.; gate hinge; distilling of turpentine; cot- 
ton stalk knocker; automatic £eui. 



MONOrOUER AND THK PEOPLK. 



The above corapriBes only a partial list of the patents issued 
in one week. Followed up for one year, the list of patents 
would swell to near 4,000, about one in twenty of which are 
of value, while the residue are of no value save to enable the 
patentee to defraud the people upon whom he imposes his 
patent, or to force the timid to pay him royalty. Of the im- 
meofie number of patents obtained for improved chums and 
washing machines, but few are of any real value. The same 
is true of patent bridges, reapers, and mowers, of threshing 
machines, seeders, and planters, of fences, and almost all farm- 
ing implements. So of sewing machines. 

Many of the patents obtained contained no new principle, 
discovery, or combination; but, by imposition and fraud, adven- 
turers obtained letters patent for something in general use, for 
the purpose of levying blackmail in the shape of royalty, upon 
those who, ignorant of any exclusive right claimed by any one, 
continue to use an article which has been in general use long 
before the letters patent were issued. But few farmers or me- 
dianics have escaped the claims of these patent right sharpers. 
Bather than be at the expense of defending a suit in the 
United States court, they submit to the demands of the man 
who presents himself as the agent or assignee of the patentee 
demanding blackmail, well knowing that the rascal has no 
legal claim, but preferring to buy peace rather than to be an- 
noyed by vexatious litigation. 

No better illustration of the results of granting letters patent 
for pretended inventions or discoveries, as well as of the care- 
less manner in which letters patent are issued, can }ye found 
than is presented by the gate known in the west as "Teel's 
Patent." This gate in its combination and construction does 
not contain a single new principle. The same identical gate 
has been in use for thirty years in various parts of the Union. 
With the addition of ** friction wheels," or "rollers," or "pivot 
wheels "(as they are indifferently called), this gate was on 
exhibition and sale in many of the western states in 18C)3. In 
fact, the patent for the friction wheels obtained in that year 
was attached to the gate and publicly exhibited, no claim being 
made for a patent upon the gate, but only upon the attach- 



PATENT RIGHTB AND THEIS ABUSES. 253 

ment The gate itself consists of battens nailed upon the ends 
and near the center of four or five boards, which forms the 
gate, with the posts so placed that after it is pnslied a sufficient 
distance to make it balance on its center, it can ))e opened, its 
center acting as the pivotal point. The balancing principle, 
for which the patent was obtained, was first discovered by two 
of the descendants of Father Adam, in their youthful days, 
when they balanced a pole or board across a log or fence, and, 
seated one on each end, enjoyed a game bf see-saw. The little 
boy who built a pig-pen years Ijefore the great intellect of Teel 
forged the idea, made the same kind of a balance gate for it 
The man or boy of past generations who desired to make a 
cheap gate, instinctively made a Teel Oate, Yet some ten 
years ago the mighty intellect of Teel forged the idea, pro- 
duced a model, and forwarded it to the patent office. The 
Scientific {Vj Examiner^ who decides upon the merits of all 
inventions, who, if he had traveled and observed the common 
farm gate in many parts of the country, must have seen 'the 
gate in actual public use, issued to Teel letters patent, which 
are safely and securely held until the new western country 
is settled, and this cheap gate is in general use, when he 
and his agents and assignees appear and demand royalty. He 
has been given an exclusive monopoly for the making, selling, 
and using a gate that is not new in any of its principles. By 
this fraud of the applicant, and the incompetence of the exam- 
iner, the farmer is forbidden to use the old invention of a 
cheap gate until he pays a bounty to a patentee. The law 
for the protection of discoverers and inventors is prostituted, 
and the people compelled to pay out their money without 
consideration. 

The same state of facts exists with respect to many other 
patents. Men travel over the country, examine all machinery 
and farming implements, not for the purpose of making new 
or useful discoveries or improvements, but for the purpose of 
learning whether they cannot so contrive as to collect royalty 
fix)m others for an invention long in use, but for which the 
inventor had not asked or received a patent. Add this 
monopoly of patent rights to the other monopolies now cursing 



254 MONOPOLIES AND THK P£X)PLE. 

the country, and the need of a speedy reform, or the alternative 
of poverty and bankruptcy among the producing classes, 
becomes still more apparent. 

This patent right monopoly is, in a great measure, owing to 
the want of pro})er care and knowledge in the department of 
the patent office, where the only pre- requisite for the granting 
of letters patent for almost anything, where the application is 
not contested, is a model and the patent office fee. The effect 
of this free and easy course in the department is to bring into 
disrepute the really valuable invention and discovery, and to 
impose upon the people useless burdens. 



CONCLUSION. 

KEFOSMATIOM OB REVOLUTION — A RADICAL CHANGE DEMANDED 

IN THE ADMINISTRATION OF PUBUC AFFAIRS — 

CONCLUSIONS OF THE AUTHOR. 

FIEST. We have sought to call the reader's attention to 
some of the monopolies existing in our land, and to show 
their power and influence with the government, and their con- 
trol of the commercial and agricultural interests of the country. 
It now remains for us to direct his attention to the effect of 
these monopolies upon the people and prosperity of the country. 
No country in the world has been as bountifully supplied by 
the Creator with all the means to make a nation prosperous 
and happy as ours. It is vast in extent of territorj'. Its soil 
is rich, and most of it new. Lying in all latitudes, it produces 
fruits of every climate. Tlie husbandman is assured of an 
abundant crop. All agricultural and horticultural pursuits 
are rewarded with large growths and bounteous harvests. Our 
shores are washed by oceans, which afford us highways, over 
which we can avail ourselves of the markets of the world; 
while flowing through the agricultural portions of our common 
country are our great rivers, upon whose waters the produce 
and manufactures of the land are transjK>rted to market. Our 
great lakes furnish us an outlet for the surplus product of the 
great west. Our sixty or seventy thousand miles of railroad 
traverse our country in all directions, i*eaching from the 
Atlantic to the Pacific, and spreading like a net-work from the 
lakes to the gulf.^ Our mines produce immense yields of the 
precious metals, while our hills and mountains are full of iron, 
coal, and lead. Petroleum flows in quantities which should 
add largely to the wealth of our common country. Our timber 
is not excelled by that of any growth in the wi»rld. Our lands 
are rich in fertility, and poor only in price. The Creator lias 

(255) 



256 MONOPOLIES AND THE PEOPLE. 

done for us all that could be desired to make us prosperous 
and contented. Our government is, or was intended to be, 
based upon the will of the people. Our constitution recog- 
nizes no royal rulers, no lords, no titled gentry. Under it we 
are all equal. They who administer the laws are selected 
by the people. In contemplation of law, all are equal — all are 
free and independent. With all these blessings and advantages 
we ought to be the happiest and most prosperous people on the 
earth. Peace, plenty, and contentment should reign supreme 
throughout the land. What are the facts ? 

Throughout the entire length and breadth of our land, 
mutterings and complainings are heard. From the farmers, 
the mechanics, and laboi'ers alike, the complaint is heard, 
" We cannot pay our taxes and support our families." " Our 
wages will not enable us to buy the necessaries of life, because 
of the large duties laid upon them." " Our farm products will 
not pay taxes, charges for transportation, and other burdens 
imposed Upon us, and leave us any margin." " We had better 
let our lauds lie idle than to attempt to cultivate them." 
These and like complaints are heard from the laboring and 
producing classes. Nor are their complaints without cause. 
Another interest has arisen in the land — it has become all- 
powerful. Tliis interest penetrates the rciuiotest portions of 
the country. It calls upon the laborer, the operative, tlie 
mechanic, the farmer, and all private citizens, for a division of 
the j^roducts of their labor. It enters the halls of legislatures 
arid of congress, and demands, and not unfrec^uently purchases, 
special privileges and powers. It visits the executive depart- 
ment of the government, and there secures special favors. It 
stalks boldly into the courts of tlie country, and tfiere procures 
unjust decisions in its interest. It indeed places its own men 
upon tliese seats of justice^ that the judiciary of the country 
may not fail to support its aims. It has already obtained com- 
plete control of tlie finances of the country. It has cx)rrupted 
legislatures and congressmen, until the law-making power has 
become a party to schemes of robbery and plunder. By cor- 
rupt legislation and ex parte judicial decisions, it has destroyed 
all the old republican landmarks, overriden the provisions of 



CONCLUSION. 257 

the constitntion, and subBtituted for the government prepared 
for UB by our forefathers an oligarchy that rules the land and 
holds the people at its mercy, and their property as its lawful 
booty. This great oppressor of the people is the railroad 
corporations and their associates, of which we have been treat- 
ing. Kailroad and other corporations, brokers, and stock- 
jobbers, have obtained such complete control over the govern- 
ment, the people, and the financial and commercial interests of 
the country, that they who depend upon agricultural pursuits, 
or upon their labor for a support, are deprived of those God- 
given rights which formed the base of our political super- 
structure. 

Fonnerly, the people, through the ballot box, governed the 
country ; they were sovereign. In this republic no rival 
power existed, and it was our boast that our people were free 
and independent. Our fundamental law is still the same. In 
theory, our people are still sovereign; in fact, most of their 
sovereignty has been legislated from them. Statutes are 
enacted compelling the people to divide their hard-earned sub- 
stance with private corporations without any consideration; 
and the highest courts of the country have affirmed the con- 
stitutionality of these laws. The freedom and equality which 
was our national l)oast, have disappeared, and instead thereof 
tljp people are ruled by cruel and oppressive task-masters, who 
are fostered and supported by legislatures and courts in their 
united purpose of controlling the country. These oppressions 
have been endured by the people with but feeble effi)rts to 
regain their rights, until the alternative is presented of organ- 
ized resistance or absolute ruin. Throughout the length and 
breadth of our common country, the laboring and producing 
classes are struggling for the necessaries of life, whilst those 
who own and manage the corporations of the country have 
firmly grasped and now control the financial and commercial 
interests of the country, and are amassing princely fortunes 
and rolling in wealth. To stay the course of their oppressors, 
and get back some of their rights, the laboring classes are 
organizing, and demanding of their employers such compen- 
sation as will enable them to supply the common necessaries 
17 



S58 MOHOFOUBS AlID THE PEOPLE. 

of life. They demand that their wages shall be increased in 
proportion to the increased cost of living, occasioned by special 
grants and privil^es bestowed upon corporations and monopo- 
lies; that instead of being treated as vassals of the despots 
who now rule the country and control the government, that 
theur rights as freemen shall be recognized. 

The operatives and mechanics are banding together tor the 
same purpose. They are all seeking, in the same degree, to 
counteract the evil effects of the grants and privileges con- 
ferred upon monopolies. The farmers, who, as a class, have 
always been deemed the most independent in the country, are 
80 impoverished by these monopolies that they have been 
compelled to band together for mutual protection. No choice 
was left them. The bestowal of such great powers and special 
privil^es upon corporations presented the alternative of utter 
financial ruin, or united and combined efforts on the part of the 
people to check the great and growing power which now is 
fattening upon their toil and industry. While under ordinary 
circumstances, all class organizations are attended with some 
bad results, yet when any interest becomes so powerful as to 
oppress all others, when it has such strength that it can defy 
all ordinary attempts at reform, then any and all organizations 
having for their object the correction of abuses, the restortion 
of the rights of the people, the destruction of an oligarclij" 
that has already obtained such power in the land as to subvert 
the very nature of free institutions, is not only right, but its 
objects are patriotic. Though the organization may have for 
its object the protection of a single interest, the correction of a 
single abuse, the restoration of a single right, it benefits all 
classes who suffer like oppressions. It is fortunate that while 
the grants of great bounties and special privileges to corpora- 
tions have resulted in great wrongs and oppressions to the 
people generally, they have also been the means of effecting 
organizations that will eventually restore to the people those 
rights which in our government are considered as inalienable. 
When the agriculturists of the whole country become united 
in their demands for redress, neither the state legislatures, the 
congress of the nation, or the courts, will dare to disregard 



oonGLuaioN. 269 

their demands. Nambering more than all who are engaged 
in other pursuits, being a majority of the whole people, when 
their nnited voice is heard it will not be an ^^ uncertain 
sound." It will command obedience. Grants of bounties 
and privileges to corporations have depressed and sometimes 
destroyed other great interests to the injury of the people, and 
divided the people into classes, one class representing the 
capital and corporate interests of the country, and the other 
comprised of the laboring and producing classes; but this 
special legislation ha3 also resulted in bringing to the front 
the great agricultural population, who possess the power, by 
united action, of restoring to the people their lost rights, while 
corporations shall enjoy equal rights with other interests, 
shorn of their power granted to them by corrupt and interested 
legislation and partial decisions of courts. This legislation 
and these decisions we have reviewed in preceding pages. It 
now remains for us to present our views upon the policy ren- 
dered necessary by the grave situation of the country. 

Sboond. — The Constitutional Right cmd Duty Renting 
v/pon the People to Repeal all Chiss Legislation. — While we 
do not claim to possess more knowledge than other men, and 
while our views as to the means to be employed for remedying 
the evils under which we now suffer may be erroneous, we 
shall venture to present them with the hope of aiding the 
efforts now being made to arrest the rapid concentration of the 
whole political, commercial, and financial interests of the 
country in corporations and other monopolies. We must not 
lose sight of the fact that under our constitution the people 
are sovereign, that the will of the majority expressed as pro- 
vided by the fundamental law is supreme; that all the rights, 
privileges, and powers possessed by a man in his normal state 
are retained by the people, save such as they have transferred 
to the different departments of the government, state and 
national; that these rights, not so transferred, can be asserted 
and enforced as occasion requires; that when those entrusted 
with the administration of the government transcend or abuse 
the powers delegated to them, and by so doing deprive the 



900 MONOPOLII8 AND THE FBOFLB. 

people of the rights they poBsess ander the constitution, the 
people are fiillj justified in resorting to whatever means may 
be necessary for the restoration and protection of those rights. 
In pursuing these necessary measures of relief, no injury is 
done to a minority, or to any individual, for the foundation on 
which our republic rests is equal and exact justice to all men, 
and the equality of all men before the law. All acts of legis- 
latures, and all decisions of courts which deny to the citizen, 
or to any class of citizens, or to a particular trade, occupation, 
business, or profession, the same privileges and protection 
granted to others, or which grant to any class of citizens or to 
corporations, privileges which infringe upon the rights of 
others, are abuses of power and assumptions of authority not 
delegated by the people to the government, or to any depart- 
m^it of it. It follows that any attempts of congress or legis- 
latures to confer upon any corporations grants of power which 
enable them to override the rights reserved by the people, 
transcend the authority with which such legislatures are 
dothed, and are not binding upon the public. As agents they 
have exceeded their power, and their acts do not bind their 
principals. If an agent acts under special authority, his acts, 
within the scope of his authority, are binding upon his prin- 
cipal; but if he violates his instructions, and attempts to make 
a contract not warranted by his letter of attorney, his acts 
have no binding force upon his principal. Tlie same is true 
of those men who are elected and appointed to fill the diflerent 
offices in the government. Tlie constitution is their letter of 
attorney. They are bound by it. When they act outside of 
their instructions, as contained in that instrument, their acts 
are void. This will be conceded. Even members of railroad 
companies will not controvert tliis proposition. The real point 
is. Who is to decide when an act is in conflict with the consti- 
tution? The answer is, the courts, for such is the law. When 
complaint is made of usurpations of corporations, we are told 
that they are only exercising the privileges conferred upon 
them by law; that the courts have decided in their favor, and 
that from these decisions there is no appeal; nor can any 
redress be obtained, because the question has been settled in 



0ON0IX8ION. S61 

iheir favor by the highest power in the land — the supreme 
court of the United States. 

To this general rule of determining controverted questions 
there must be some exceptions, unless we concede that supreme 
power is vested in- the courts, and that the constitution clothes 
them with all the attributes of despotic governments. We 
have shown that judges of courts are governed and controlled 
by the same influences which influence other men; that they 
are not infallible; that their decisions are influenced by sur- 
rounding circumstances ; that education, association, and 
habits of life, have an important bearing upon their minds, 
and not unfrequently warp their judgments, and it is not 
treason to say that decisions of state and federal courts prove 
that they are as liable to change their views as are the 
majority of the people. The supreme power must have a 
permanent lodgment somewhere. If it remains with the peo- 
ple, it does not vest in the supreme court, and that court is 
but the agent of the people, and acts for them when it decides 
upon the validity of a statute, or defines the rights and duties 
of the people. Under our form of government, certain rights 
and powers are conferred upon the general government; these 
are all such as are necessary for our existence as a nation; they 
are limited, and should be strictly construed, because all 
powers and rights not expressly conferred upon the general 
government, "are reserved to the states or to the people." 
The states being sovereign, their power is superior to that of 
the general government, save in those matters surrendered to 
it. Ilence the state governments have a general, expressed, 
and implied jurisdiction in all matters not surrendered, and 
state constitutions are to be liberally construed. 

But over and above the powers vested in the general and state 
governments, that God-given right of self-protection remains 
with the people. Tliis right they have never surrendered to leg- 
islatures or to courts. If by the action of the legislature, or of 
congress, or of the courts, the rights reserved to the people can 
be abridged, denied, or destroyed, then we do not live under a 
republican, but are the subjects of a despotic, government. 
If congress were to enact a law providing that one-tenth of the 



968 MONOFOUBB AND THE PEOPLE. 

■mnal inoome of each inhabitant in the land shonld be paid 
to railroad corporations, and the supreme court of the United 
Stetes shonld decide the act to be constitutional, if it be true 
that there is no appeal from these decisions, and that as good 
dtiflens of the government we are obliged to accept them as 
Tdid and binding, there could be no redress. This doctrine 
of Bnbmission we do not endorse. Such a decision would 
erase the people to resort to the powers and rights retained by 
tfaem, and to make use of whatever means they possessed to 
leverae or destroy the force and effect of such a decision. They 
would be justified in resorting to nature's first law to rid them- 
selves of so unjust a decision. While no such law has been 
passed, and no such decision has been made, laws have been 
enacted, and their validity affirmed by the courts, which are 
paving the way for the destruction of the civil and political 
rights of the people, and the centralization of all power in the 
general government. By a series of legislative enactments and 
decisions of courts, special privil^es have been conferred 
upon railroad companies antagonistic to, and destructive of, 
the rights of the people. How are these rights to be restored? 
These questions will now claim our attention. 

All laws granting to railroads or other corporations organ- 
ised for pecuniary profit, special and exclusive privileges, 
which encroach upon the rights of the public, should be re- 
pealed. The most prominent argument againt repeal exists 
in the doctrine that railroads are public highways, and that a 
charter granted to a railroad corporation by the legislature is 
in the nature of a contract, and is therefore irrepealable. By 
the constant and persistent assertion of these propositions, and 
by frequent adjudication of the questions, candor compels us 
to admit that the current of judicial decisions supports this 
doctrina Tet as the ancient dogma of tyrants, ^' The king 
can do no wrong," does not obtain in this country, we beg 
leave to call in question the soundness of this doctrine. If 
railroads are public highways, there can be no question as to 
the right of l^islatures to exercise the same control over them 
that they assert in regard to common public roads. If they are 
public, private parties cannot have the exclusive control of them ; 



OONOLUBION. 363 

nor can the logislatare grant away the rights of the public by ex- 
elusive charters to private parties, for the reason that the leg- 
islature (the department of government which enacts all stat- 
utes) cannot, by the enactment of a statute, take from the 
whole people one of the rights belonging to them and confer 
it upon a private corporation. The legislature has no power 
to enact a statute declaring a foundry, or a mill, built by an in- 
dividual or a company with private capital (the absolute title 
vesting in such party) to be a public foundry or toill. If such 
a statute were enacted, it would not change the title to the 
property, nor would it prevent the owner from using and ea- 
joying it as his own, exclusively. Whether it be called public 
or private would not change the nature of the ownership or 
convert the interest into public property. No matter by what 
name it might be called, it is still private property. The same 
is true of railroads. They are built and owned by private cor- 
porations ; they are under the control of their owners, who retain 
for their own use the earnings of their roads. If these roads 
are public highways, then the legislature, acting for the public 
good, occupies the anomalous position of granting charters to 
private parties to construct public highways, and to own them 
after their construction. The supreme court of the United 
States, and the courts of some of the states, have decided that 
they are public highways, and, according to the usual custom, 
these decisions are to be received as final. 

The courts having declared them public corporations does 
not change the facts in the case. The facts still remain. The 
roads are owned and controlled by private corporations. The 
title cannot be taken from them arbitrarily. The companies 
receive the earnings of the roads, and every fact contradicts 
the decision of the courts. If the courts were to decide that 
a crow was white and not black, we would acknowledge the 
binding force of the deci8ion,"and admit, that by virtue of the 
decision, the crow is white. But when we look at the factj we 
would still insist that, notwithstanding the decisions of the 
courts, the crow is as black as it was before the decision was 
made. If the courts were to decide that common highways 
were railroads, as a matter of law we would accept the decis- 



864 MONOPOIJEB AND THE PEOPLE. 

ion as final; bnt as a matter of fact we would know that they 
were common highways. Railroads, owned and controlled bj 
private parties, are not public highways. If railroads are pub- 
lic highways, then the other position, that the charters granted 
to railroad companies are irrepcalable, is not tenable — ^for the 
reason that the legislature ^possesses full power to alter, amend, 
or repeal all laws enacted for the benefit of the public Pub- 
lic highways are public property as much as public buildings, 
court houses, school houses, asylums, and other institutions 
created for the use and benefit of the public. The legislature 
does not possess the power to vest in a company the exclusive 
right to build and own any of these public buildings. If a 
diarter were granted for any such purpose, it could not be 
claimed that it was in the nature of a contract between the 
state and the company, absolutely binding upon all future leg- 
islation; that the company had acquired, by virtue of its char- 
ter, rights that neither courts nor future legislatures could dis- 
turb. Or suppose that a private company should obtain a 
charter for constructing and owning all the highways within a 
certain township or county, would it be contended that future 
legislatures could not alter or repeal the charter? If railroads 
are public highways, the companies constructing them must 
be subject to the same laws and decisions that apply to all 
other matters of like public character. Their charters are at 
all times under the control of the legislative authority, and 
subject to be altered, amended, or repealed. Being the com- 
ponent part of the government, of a public nature, the doctrine 
that private parties can acquire rights in the nature of a con- 
tract that cannot be disturbed without their consent is not ten- 
able. Whether railroads are to be considered as private prop- 
erty, or as public highways, they are subject to the control of 
the legislature — because, under the constitution, the power 
to create corporations by charter, with absolute powers, 
does not exist. If the converse of this is true, then leg- 
islatures could, by conferring special privileges upon in- 
dividuals and corporations, deprive the public of all attri- 
butes of sovereignty, and place the entire government in the 
hands of individuals and companies. The constitution has 



• ooNCLUMoir. 366 

'oohfeirred"Tio 'each power upon any department of the govern- 
ment. If such power is conferred, the constitution, instead of 
being the paramount law as intended — establishing the rights 
of the people, controlling legislative enactments, defining the 
powers of the different departments of the government, and 
guaranteeing protection from unjust and oppressive laws, and 
decisions of courts — is intead but an instrument to be used 
for the enslavement of the people. The power to grant to 
private parties a monopoly of any of the rights belonging to 
the whole people, or to confer upon these private parties such 
exclusive privileges as will infringe upon or take from the 
public, the rights that naturally attach or belong to the whole 
people, was never conferred upon the legislature of the state 
or nation. If legislatures have entered into contracts with 
corporations, under which the rights belonging to the people 
arQ transferred to such corporations, they have exceeded the 
power vested in them, and the charters granted, so far as they 
infringe upon the rights of the public, are null and void. The 
plea that a repeal or amendment of such charters would destroy 
vested rights, has no forc^, because the power to make such 
grants or contracts is wanting. Nor does the plea that inno^ 
cent third parties would suffer, add any sti^ngth to the posi- 
tion. The corporations are the parties with whom these 
innocent parties contract, and to whom they must look for the 
fulfillment of their contracts. All acts of legislatures, grant- 
ing to railroads or other corporations, rights ^belonging to the 
whole people, are subject to the control of future legislatures, 
and are repealable. The only purpose for which a railroad 
charter should be granted is to subserve the public interest. 
For this purpose the legislatures possess the power to confer 
upon corporations such rights and privileges as are necessary 
to enable them to have continued being, and to transact busi- 
ness, but reserving at all times the right to control them and 
reform abuses. Good faith on the part of railroad companies 
requires of them fair and honest dealing with the people. 
Adopting the idea that the public was to receive great benefit 
from the construction of railroads, large grants of land, sub- 
sidy bonds, local mimicipal subscriptions, donations of money. 



969 MONOPOLIM A2TO THE PEOPLE. 

azid direct taxation in different localities, have been afforded 
the different companies for the purpose of aiding in the con- 
struction of their roads. The benefit the public was to receive, 
and which the companies agreed to afford, was the only con- 
sideration expected by the people. This consideration the 
public has never received. We have shown the course pursued 
by railroad companies in constructing their roads — watering 
fheir stock and selling their bonds, and the oppressions prac- 
tioed by them to force from the people the means for declaring 
dividends on fictitious stock, and to pay the interest on the 
immense amounts of bonds issued and sold to the different 
oorporations. Assuming that their charters are contracts 
between themselves and the states, they defy all efforts made 
by the people to arrest their extortions. Our government being 
instituted for the protection and benefit of the whole people, 
they possess the power, and it is their right, to amend or 
appeal all laws that deny or abridge their own rights. Bailroad 
companies should be compelled to reduce their stock to the 
aetualtost of constructing their roads, and the rates of charges 
for the transportation of freights «and passengers should be 
fixed by statute at such rates as would afford a fair dividend 
upon the capital aetually invested. The public should not be 
compelled to pay interest or dividends on stock or bonds issued 
in excess of the actual cost of the roads. The property of rail- 
road companies should be taxed by the same rules, and at the 
same rate, as the property of individuals. A general super- 
vision of all railroad corporations throughout the country 
should be exercised by the respective state authorities. It may 
be said: "All this is proper, but how will you accomplish it ? 
All efforts heretofore made in that direction have been defeated 
in the different legislative bodies, or by the decisions of the 
courts." We are compelled to admit that if future attempts 
at reform are to be measured by past efforts, the prospect is 
not flattering. When relief bills have been introduced into 
legislative bodies they have generally failed. Railroad men 
have been able to defeat almost every attempt at reform. Tlie 
idea seems to have obtained in all legislative bodies that the 
men who built railroads were self-denying ; that they wore 



OONGLTT8ION. 807 

philanthropiBts ; that for the purpose of developing the conn- 
try, of affording speedy and cheap transportation to the eastern 
markets of the products of the west, they were sacrificing their 
personal comfort and wealth, and that the least the people 
could do was to extend to them a helping hand — to grant 
them local aid, to exempt them fix>m taxes, to assist them in 
procnring the right of way, and, instead of enacting laws t6 
protect the people from the abuses of railroad corporations, 
statutes should be enacted to prevent any interference with the 
corporations, and allowing them extraordinaiy privilegea. 
Men who were elected to the legislature under pledges to favor 
the passage of statutes for the protection of the people against 
the encroachments of corporations were found enlisted in theii' 
favor, and these monopolies, instead of being restricted in 
their powers, have continually received additional favors and 
privileges. 

When the people have appealed to the courts for redress, 
they have met with defeat. Lengthy decisions have been writ- 
ten and published, setting forth the great benefit of railroads, 
instructing the people that railroad charters are contracts, and 
that unless courts decide in favor of railroad companies, " in- 
nocent third parties," who have purchased railioad bonds, will 
sustain loss. Thus, through the legislative and judicial de- 
partments of the government the people are reduced to a state 
of vassalage, with railroad corporations as their masters and 
rulers. • 

Notwithstanding this gloomy outlook, the people still retain 
sufficient power to correct the evil and to recover their consti- 
tutional rights. The country is now divided into two parties. 
One party is composed of the .people, strong in nothing but 
numbers and the determination to battle for their rights; the 
other side is composed of corporations, stock-jobbers, brokers 
and capitalists, whose strength consists in the organization and 
consolidation of their interests, their control of the finances 
of the country, and of the different departments of the govern- 
ment. The lines dividing these parties arc clearly and dis- 
tinctly marked. Their interests are conflicting. The' people 
now demand such legal enactments as will i*cstrict extortionate 



968 • MONOPOLIES AND THB FBOFLE. 

ehaiges by railroad oompaniee, and compel tliem to pay ttieir 
jnst share of taxes for the support of the government. Legis- 
lators being elected for short terms, being frequently called 
upon to render an accoiint of their ofScial acts to their consti- 
taents, if the people are united and persistent, it will not be 
difficult to procure the passage of such statutes as will compel 
railroad companies to deal fairly and honestly with the public 
To effect reform and obtain redress, the aid of another depart- 
ment of the government must be obtained, to wit : the courts 
of the country. 

Thibd. — The People home a Precedent for a Pledged JvMd- 
QTy. — In treating of the courts and their decisions we are ven- 
turing upon grounds that will subject us to triticism. The 
decision of a court of last resort upon controverted questions 
is generally received as final. In questions of constitutional 
law, or when the rights of the public or of private parties 
are involved, the final decisions of our highest tribunal are 
accepted by general consent as the supreme law of the land. 

We look upon the judges of courts as men possessing supe- 
rior legal sagacity, and upon their decisions as embodying the 
highest wisdom. The congress of the nation, or the legisla- 
tures of states — composed in part, at least, of men of extensive 
legal knowledge, who have made the science of government a 
life-long study, who have carefully and critically examined the 
proyisions of the constitution, who have full knowledge of the 
mischief to be remedied or the rights to be enforced — carefully 
digest, prepare, and after full discussion in their respective 
bodies enact a law which they believe will accomplish the 
intended purpose, and at the same time contravene no pro- 
vision of the constitution. An attempt is made to enforce 
the law, and a qaestion arises as to its constitutionality, or its. 
meaning and effects. The court is appealed to. On tliis 
bench are sitting three, five, seven or more jnrlges. Alter 
argument this court, by a majority of one, decides tlie law un- 
constitutional, giving to it an interpretation which defeats the 
object for which it was enacted. The ininurity of the court 
dissent from the opinion of the majority, and set forth at 



ooNOLusroN. 969 

length the reasons for such dissent. The fact that liye judges 
concnr in the majority opinion and four dissent makes fhe 
decision of one man the supreme law of the land. It annuls 
acts of cong^ss and state legislatures, and makes the opinions 
and decisions of four members of the court concurring with a 
majority of congress of uo avail. One man's opinion is the 
law for the whole people. This we have shown in the action 
of the supreme court in the legal tender cases. Now it is not 
considered out of place to criticise the acts of congress or of 
legislatures, or the motives and influences that govern and 
control those bodies in the enactment of laws; yet it is looked 
upon as almost treasonable to refuse to accept the decisions of 
courts as good law, or to discuss the motives and influencee 
leading to these decisions. In 1869 the supreme court of the 
United States, by a majority of one judge, decided that treas- 
ury notes were not legal tender for pre-existing debts. In ^ 
1871 the same court, by a majority of one, decided they were 
a legal tender for all debts, public or private, save when there 
were special exceptions. So in other questions in the United 
States courts, and in the courts of the states, it has sometimes 
happened that the law of the land has been changed by the 
chan£^ of one or two judges. In Iowa this is demonstrated 
in the decisions of the supreme court upon the questions 
whether the legislature could authorize the levy and collection 
of a special tax to aid in the construction of railroads. We refer 
to these matters to show that judges are not infallible, and that 
sitting as courts, they are apt to differ as to the law and facts 
of the case. Instances are not wanting when judges have 
been appointed and elected because of their views upon certain 
questions, and when with the changes of the personnel of the 
court, its flnal decisions have been reversed, thus making the 
supreme law of the land depend upon the election or appoint- 
ment of one man to the bench. The argument to be drawn 
from this is, that no such sanctity surrounds the court or judges 
as forbids a scrutiny of their decisions or the motives pK)mpt- 
ing them. But it is said, if you discuss the motives underly- 
ing judicial decisions, you will debase the judiciary of the 
country; that candidates for the bench, like those for legialA- 



S70 



MONOPOLIES AND TUK PEOPLE. 



tive or executive offices, will be selected because of their views 
MBpeeting certain interests and questions that may come before 
them for judicial determination, and, like legislators they will 
be appointed or elected because these views harmonize with 
those of certain classes or interests. The answer to this is, 
that as a general rule judges are now appointed or elected 
because of their political views. In almost every instance the 
man who is elected or appointed accords in his political views 
with the majority, and indeed, men have been nominated and 
elected, or appointed, as judges of courts because of their pub- 
licly expressed opinions on some particular subject. The 
decisions of courts upon constitutional and other questions 
change frequently. The most important interests and rights 
of the people under the constitution and laws of the country 
have been differently decided by the same court of last resort 
in both national and state tribunals. The constitution has 
been declared to mean one thing at one time, and a directly 
opposite meaning has been given to the same clause at another 
term of the same court, with but a few months intervening. 
An elasticity has been given this instrument neither contem- 
plated by its framers, nor calculated to increase respect for it, 
or for the judiciary of the country. While we would not 
advocate the policy of candidates for judicial offices pledging 
themselves upou any questions that may come before them for 
a decision, we claim that the people should exact from every 
candidate a pledge to " support, protect, and defend the con- 
stitution," to abstain from the dangerous practice which now 
obtains of construing the fundamental law of the land in favor 
of particular interests, and to abstain from judicial legislation. 
More danger to the liberties of the people is to be apprehendeil 
from the courts, than from any other source. The constitution 
is inelastic, unchangeable, save by amendment in the manner 
provided. No court should disregard it, nor warp its meaning. 
If the rules of construction practiced of late are to be con- 
tinued, its sanctity is destroyed, and its provisions are no mon 
binding than those of a statute. It is the duty of the courts 
to interpret the constitution, but not to supply its (to them) 
teeming defects, or to override its plain provisions. We all 



OONOLUSION. S71 

fed a deep interest in the election of legislators, for the reason 
that all are to be affected by the laws enacted, but we seem not 
to realize to its fnll importance the fact that all laws passed by 
congress or a state legislature are liable to be declared noil and 
void by the courts; that the interpretation and oonstructioii 
of statutes belong exclusively to the courts; that the men 
elected to judicial positions, under the constitution, are clothed 
with a power superior to that of the legislative and executive 
departments of the government; that by a single decision the 
supreme court of the state, or of the nation, can suspend or 
annul a statute which has been in force for years, or that an 
interpretation of the constitution, long acquiesced in, can be 
reversed and a new meaning given to it. Yet these are fiictB, 
and from these decisions there is no appeal. The courts may 
change their opinions upon constitutional questions at every 
term, and the nation must receive their decisions as the supreme 
law. 

We have said that the constitution is inelastic It mn)it 
remain so for the protection of the rights of the people. If 
courts can change its meaning as occasion requires, the will of 
the court and not the constitution, is the supreme law of the 
land. The decisions of courts, in the recent conflicts between 
railroad corporations and the people, and upon the legal tender 
question, demonstrate that the will of the court is already the 
supreme law of the land. One of the questions in the deter- 
mination of which the courts have substituted their will for 
constitutional law, relates to the authority of state governments 
to aid in the construction of railroads. The constitution of 
Iowa prohibits the state from participating in or becoming a 
stockholder in any private corporation or any corporation 
created for profit. Counties are, necessarily, a^part of the 
government; their creation and organization are a necessity in 
the administration of the state government. While the state 
is prohibited from aiding in the construction of railroads, the 
courts have said that the constitution does not prohibit coiin- 
ties from subscribing stock to railroad corporations and creating 
onerous debts in payment therefor. In other words, while the 
constitution forbids any participation on the part of the state, 



S7S MONOFOUEB AND THE PBOPLR. 

SB a state, in the construction of railroads, it is no violation ot 
the fundamental law for the inferior branches of the state 
fp>vemment to become stockholders in the same corporations. 
.Though the whole state is forbidden to aid in the construction 
of railroads, by dividing the state into counties, it is no viola- 
tion of the fundamental law for these counties to aid in their 
construction. No one doubts that it was the intention of the 
finoners of the constitution to protect the people against the 
evils of oppressive burdens always resulting from a participa- 
tion of the public authorities in the construction of railroads. 
The question of the authority of counties to subscribe stock to 
railroads, in Iowa, has often been before the courts. The 
decisions have been numerous, but not unanimous or uniform. 
At no time has the supreme court of the state by unanimous 
decision held that the power existed; but on several occasions 
tiie court has united in deciding that the power did not exist, 
the constitutionality of such right depending entirely upon 
who were elected judges. Thus the fundamental law, which 
can only be changed by amendment in the manner provided, 
has been held to permit or forbid public aid in building rail- 
roads, as suited tlie peculiar views of the men who had been 
elected judges. What was constitutional one day was uncon- 
stitutional the next. The decision of the men who happened 
to occupy seats upon the supreme bench, has been the supreme 
law, and not the constitution. On the question of voting local 
aid to railroads the supreme court decided that the act of the 
l^slature authorizing such aid was unconstitutional. In one 
year from that time the same supreme court, three judges con- 
curring, decided that the law was constitutional, the reason of 
this variance being that in the interim two judges had retired 
from the bench and two new ones elected in their place. Here, 
again, the will of the men who happened to be elected changed 
the meaning of the constitution. Tlie same curious history 
has been enacted in many other states. When men who are 
interested in railroads, or who desire that the public should 
aid in their construction, occupy Beats on the bench of the 
supreme court, the constitution is construed to allow such aid, 
and where the judges are opposed to the allowance of such aid. 



oQNOLusioir. 9T8 

they decide the constitation does not authorise, bnt forbids it 
In each case the fundamental law is interpreted to suit Ae 
peculiar views of the judges who occupy the bench, until it 
has ceased to have any binding effect With this state of fiEUSts, 
known to all men, it is not strange that the people now demand 
pledges from men who aspire to judicial station. When state 
constitutions are made to mean anything or nothing, as suits 
the men whose duty it is to interpet them, and when laws 
are pronounced constitutional or unconstitutional, as caprice or 
the interests of corporations may prompt '^nature's first law, 
self-preservation," demands that those who aspire to become 
judges of courts should be controlled by the constitution 
rather than by their personal views as to what it should be; 
and that they should be fully committed and pledged to 
abstain from judicial constructions of the constitution which 
abridge the rights gf the people and increase the power of cor- 
porations. While the decisions of the state courts have tended 
to abridge the rights of the peo{)le and increase the already too 
great power of corporations; while they have, in fact, decided 
that, under the constitution, a citizen can be compelled to 
bestow a part of what he possesses upon railroad corporations 
without an equivalent, the greatest danger to the liberties of 
the people and the perpetuity of republican government is to 
be apprehended from the supreme court of the United States. 
It possesses, under the constitution, unlimited jurisdiction 
upon all matters arising under the constitution and laws of 
the United States, but not the same general jurisdiction that 
appertains to state tribunals. Yet, as under the constitution 
it is a court of last resort, and its members hold their o£Scee 
for life, it is independent of the people. Not only so, but it 
cannot be called to an account by any department of the gov- 
ernment, state or national. It possesses powers superior to all 
other departments of the government; it rises above all law, 
and becomes a law in itself. Its decisions being final, the 
whole people must accept them as the supreme law of the land. 
No matter how oppressive, or unjust, or absurd, the whole 
government and people must accept these decisions as the 
highest law and authority in the land. These fiacts, taken 
18 



974 MONOFOUBB AND THE PBOFLE. 

into consideration with some of its recent decisions in fayor 
of railroad corporations and other monopolies, raise the ques- 
tion whether we are governed by constitutional law or by the 
edicts of the supreme court, promulgated in the gtiise of 
judicial decisions. 

Let us look at a few of these decisions, now in full force as 
the law of the land. In the construction of railroads, coun- 
ties, dties, and towns have assisted by subscribing stock and 
levying taxes to pay such subscription. State courts have de- 
cided that under the constitution and laws of the states such 
Bubecription was unconstitutional, illegal, and void. The power 
to afford such aid to railroad companies was derived from state 
filBtntes, passed by virtue of the power presumed to be con- 
ferred by the constitution. Following precedents which had 
been established and recognized from the organization of our 
government, the decisions of the state couvts should have been 
final and binding upon the courts of the nation. Yet the 
Bupreme court of the United iStates, by a bare majority of one, 
in violation of all precedent, assumed power not conferred upon 
it by the constitution of the United States, annulled state con- 
stitutions, disregarded state laws, and reversed and refused to 
be bound by the decisions of state courts. The will of one 
man, who happened to occupy a seat upon the supreme bench, 
is made the supreme law of the land, not by virtue of any pro- 
vision of the constitution, but by trampling upon tlie rights of 
states and the people. When it is remembered that these de- 
cisions were made in favor of coq)oration8, and that their effect 
was to compel the people to contribute a part of their substance 
to help build up and strengthen monopolies, which have proved 
to be oppressive task-masters, we are justified in saying that 
the fundamental law of the land has been misinterpreted and 
the rights of the people sacrificed. We assert that no provis- 
ion of the constitution can be shown that even indirectly 
authorizes taxation to aid in the construction of railroads 
owned by private corporations. Tlie idea is at war with every 
principle of right and justice. When the supreme court of 
the nation assumed to decide in favor of such authority, it 
occupied the position and assumed the prerogative of an abso- 



OONOLUSION. S76 

lute monarch. The supreme court of the United States waa aa 
mnch boand by the dedfiion of the state courts upon questiona 
arising under state constitutions and laws as were the courts 
of the states by the decisions of the federal courts upon ques- 
tions arising under the constitution and statutes of the United 
States. The adoption of a different rule will subvert the 
principles of our government, and, as a necessary result, the 
will of the supreme court will become the supreme law of the 
land. 

We might give other instances wherein the federal courtB 
have overridden state tribunals without warrant of law and in 
disr^ard of state rights; but we pass to another question 
which is now engrossing public attention, and upon which the 
supreme court has recently made a decision. The question 
whether railroad corporations are public or private has been 
before the supreme court. The court has passed upon it^ and 
decided that railroads are public highways; but it has not yet 
decided that railroad corporations are public. No question 
connected with railroads is of more importance to the people. 
K they are public highways, then the legislatures of the statee 
have full control of them, and the roads are as much a part of 
the public or common property of all the people, to be used 
as occasion requires, as are common highways. Then the right 
to levy and collect taxes to aid in their construction, or to 
wholly construct them, cannot be questioned. The supreme 
court of the United States, in a very recent case appealed firom 
the state of Wisconsin, has decided that for the purposes of 
taxation, railroads are public highways. The opinion was de- 
livered by Justice Strong, and is ingenious as well as unique. 
We desire to call the reader's attention to some portions of it^ 
for the purpose of shovdng how the rights of the people are 
protected by the judiciary of the United States. The opinion 
pronounced by Justice Strong fully illustrates the fact that 
association and education will influence the decisions of judges 
as well as those of other men; and while we impute no im- 
proper motives to the judiciary of the nation, we say that this 
decision disposes of some of the rights of the people, supposed 
to be fully protected by the fundamental lawj with as little 



876 MONOPOUBB AND THE PBOPLK. 

heeitation as would be manifested by aii inferior court in a 
oase involving only the plainest legal points. The court says: 

^The legislature cannot create a public debt, or levy a tax, 
or authorize a municipal corporation to do so, in ord^ to raise 
flinds for a mere private purpose. It cannot, in the form of a 
tax, take the money of a citizen and give it to an individual, 
the public interest or welfare being in no way connected with 
the transaction. The objects for which money is raised by 
taxation must be public, and such as subserve the common 
interost and well-being of the community required to con- 
tribute." 

That this is good law, all will admit; but what shall we say 
of the following, copied from the same opinion: 

**To justify the court in arresting the proceedings and declar- 
ing the tax void, the absence of bXH possible pnAlic interest in 
the purpose for which the fands are raised must be dear and 
palpable — so clear and palpable as to be perceptible by every 
mind at the first blush." 

It is decided by the supreme court of the United States that 
if there is any ^^ possible public interest" in the purposes for 
which a tax is levied, then such levy of tax is constitutional, 
and this decision is to be received as the supreme law of the 
land. Is this good law? The public has an interest in toll- 
bridges, plapk roads, ferries, manufacturing companies, and 
many other enterprises prosecuted and controlled by private 
corporations and individuals — are these all so connected with 
the administration of the government as to be proper objects 
of compulsory contributions for their support? The man who 
crosses the bridge pays toll; the party driving over the plank 
road does the same; the ferryman exacts'fare — and all receive 
it, not for the benefit of the public, but for their own private 
uses. Yet the public have an interest in them. Are they 
public corporations? Suppose the legislature of the state 
should, by statute, declare them public corporations, under 
what provision of the constitution is found the power to tax 
the people for their construction while they are owned and 
controlled by private parties? Stage coaches and steamboats 
are owned by private parties; they are common carriers, sub^ 



OONGLUBIOV. 37T 

ject to be regulated and controlled by law; tne public have an 
interest in them; the legislature can prescribe rules and regu- 
lations to be observed by them in the prosecution of their busi- 
ness as common carriers. Can the people be compelled to pay 
taxes for their support? No distinction exists between common 
carriers by water or by land over ordinary highways and rail- 
road companies as to their rights and duties when the public 
are concerned, except that railroads cannot be built until the 
companies building them have procured the right of way. Pri- 
vate companies own the roads; they sell and mortgage them; 
they receive all the profits, and control them in their own inter- 
est If a tax can be levied to aid in building railroads owned 
by private parties, then taxes can be levied in amount sufllcient 
to build the entire road. K the decision is sound, its results 
will prove most disastrous. 

The people will be compelled to build the roads for private 
corporations, and, after they are built, pay toll or fare for the 
privilege of using them. The people pay for the roads, yet 
they do not own them, and have no interest in them, or right 
to use them, except upon payment of such sums as the private 
corporations owning them may choose to demand. We insist 
that no such power is vested in the legislatures or in congress. 
If the power does exist — if the people can be compelled to 
build railroads for private corporations — in the language of a 
distinguished judge of the state of New York, " It is legal 
robbery, less respectable than highway robbery, in this: that the 
perpetrator of the latter assumes the danger and infamy of the 
act, while this act has the shield of legislative responsibility." 
The efiect of this decision is to make railroad companies a 
component part of the government, to draw more clearly the 
line between the people and the combination of monopolies 
that now control the country. When the court of last resort 
in the nation comes boldly to the front, and, by an edict (for it 
cannot be treated as a judicial decision), declares that unless 
there is an ^^ absence of all possible public interest, so clear 
and palpable as to be perceptible by every mind at first blush," 
the power to levy and collect taxes in aid of railroads owned 
and controlled by private corporations exists, the people have 



are v 

heBitation as wc 
case involving <>!i. 

"Tlic legifllfttiiiv 
or authorize a iniwi 
fiindR for ft menr , 
tax, take the m«Hi., 
the public intiM • 
fhe tranRactioii. 
taxation vwwk ^ 
interest and \\ 
tribute." 

Tliat tills i. 
of the tM1«»w! 

"Tojnsti?. 
ing the U\\ . 
thepiirjiM: ■ 
palpahli! 
mnid at t';. 

It U <i=.- 
if then 
wliirl, . 
ami '.'■ 

hlll'i. 
hrii:. 
Tli:( 

ro: . 
tl-" 
t ■! 
r ■ 
I 



•.iiA''»iuis and not the con- 
^«ac law. But mivs the 

:.. icLeti by private corpora- 

..,- .i^hways has been the 

.. -nice such conveniences 

. ..id an existence. Verv 

- -:ace*s right of eminent 

.iL*.- o»q)oration created for 

. .av, Cleai-ly it could not, 

..fv.se was taking land for 

.... iomain nowhere justifies 

...L .>t'. \ et it is a doctrine 

.w Si. Mature may authorize a 

. . : -k ::ie construction of such 

..•■ .viier. What else does the 

.. .:.;^' a railway, though it l)e 

. - l;i .icc done for a public use. 

«. ..- :..vays been held a public one 

i^away, whether made liy tlie 

^-...1. * .►;■ v.'or}H»rate lx>dies, or even 

::k'.: puwer to con struct it 

' ,i:i iiad la-en employed at* 

X ^ ■-• k-i»IUvt the tax, no more 

.. -i iuivt' been for the claim- 

:.. :i. As a finishing argu- 

^ »v.. :!io I'ourt says: *' Whether 

i private t)ne de})ends in no 

. >• ..>;riu-iL'd it or who owns it.'* 

. . .,..^ »v UM'd tor public purposes; 

. • i.:;u";io> to them: that, being 

.. ... '.i: tlu' riu^ht of eminent do- 

, ...... .i-.i, .King public highways, 

.. XX . ^- :*' ju'ivate }Kirties in con- 
... .-.x. ii.v^Uirii i»f this dt'L-isiou to 

...v. K< rtas-«»uing rtrsorted to 

.. \ t'.at railroads o\\iR»d and 

^ .. . .;i":!i^ art* public highwa3'6, 

N ;*\v\i ;.' Inii'id and maintain them. 



CX)NGL17BI0N. 279 

If the supreme court of the United States possessed the power 
under the constitution to pass upon the constitutionality of 
the law of the state of Wisconsin, we would be oompdled to 
accept this decision as the law of the case; to acknowledge 
that as a question of law private railroads were public high- 
ways; yet, as a matter of fact, we would still hare to insist 
that they remained private roads, over which the public could 
ride or ship freight, upon making compensation to the owners, 
just as they could ride or ship freight upon a steamboat or 
common road wagon upon paying the required amount to the 
owner or master. While legislatures grant to railroad compa- 
nies the right to appropriate the lands of others in procuring 
the right of way, upon making compensation therefor, no part 
of the price for this right of way is paid by the goyemment^ 
or the public. It is paid by the companies building the roads. 
We are not prepared to admit that the grant of this privilege 
to railroad companies makes them a part of the government, 
or that it clothes them with any of the attributes of sover- 
eignty. Taxes can only be levied for public purposes, for the 
support of the government, and for the benefit of the public 
The compulsory payment of taxes to private corporations 
cannot be supported upon any other basis than of our govern- 
ment being a despotism, and not a constitutional republic. 
We have before referred to the action and decisions of the 
supreme court on questions arising between the people and 
corporations, and only refer to it here for the purpose of show- 
ing the necessity of reform. The action of the courts shows 
that, whatever may have been their intention, they have de- 
parted from old constructions of the constitution; that judicial 
legislation has superseded constitutional restrictions and lim- 
itations, and that the personal views of the judges constituting 
a majority of the court have become the supreme law of the 
land. 

Another noticeable fact is that the recently appointed judges 
are the most prominent in this new departure. We make the 
assertion that the supreme court of the United States does not 
possess the power under the constitution to overrule or disre- 
gard the decision of a state court upon questions arising under 



d80 MONOPOmS AUD THE PEOPLE. 

state laws and constitutions. No paragraph, line, or syllable 
of the constitution of the United States confers this power upon 
the supreme court, save when the state law or constitution con- 
trayenes some provision of the constitution of the United 
States, or some statute passed in aid of constitutional pro- 
visions. If the reader will examine the decisions from which 
we have been quoting he will find that the rights of the states 
and of the people, expressly guaranteed by the constitution, 
have been, by a bold and unwarranted assumption by the United 
States supreme court, obliterated. The decision of the supreme 
court of a state, whose decision was final and binding upon 
the supreme court of the United States, has been overruled 
and declared null and void — not by virtue of any constitutional 
right vested in the United States court, but by an assumption 
of power making the will of that court the supreme law, and 
placing corporations beyond the control of the states granting 
them their charters. The fact that the reason upon which the 
decision is based appears in the nature of an apology for the 
decision, while constitutional rights are lost sight of, proves 
the truth of our assertion, that judges of courts are subject to 
influences that control other men, and that the interest of 
monopolies, and not the constitutional rights of the people, 
has a controlling influence in the highest court in the nation. 
It also demonstrates the fact, that no thorough reform can be 
eflected until the constitution of our common country shall 
control the decisions of the courts. 

In proof of the facts that the decisions of the supreme court 
of the United States are not always controlled by the constitu- 
tion, let us again refer to the legal tender decisions. Here 
again the opinion of a bare majority of the court (five of the 
judges concurring and four dissenting) establishes the law for 
forty millions of people, and does violence to both the letter and 
spirit of the constitution. Under the constitution the power 
to coin money and regulate its value is vested in congress. 
The states are prohibited from coiiiing money, and from mak- 
ing anything but gold and silver coin a legal tender in payment 
of debts. The letter of the constitution does not deny to con- 
gress the power to issue paper money and make it a legal 



0ON0LU8ION. 281 

tender; but when we take into consideration that the power is 
denied to the states, the conclusion is irresistible that the power 
was intended to be denied to the general as well as to the 
state governments. While as a war measure the power might 
be exercised, it certainly could not be in time of j^eace. * Being 
one of the extraordinary powers vested in congress in time of 
war, rising above the constitutional restriction, if we may use 
the expression, governed by the law of necessity, the power 
should not be enlarged by judicial interpretation, nor should 
the plain letter of the acts of congress passed as war measures 
be made to extend beyond its express provisions. When the 
highest court in the nation decided that the legal tender act 
was retroactive in its operations, that court decided, in effect, 
that under the constitution congress possessed the power to 
annul contracts made between private citizens, that one might 
legally take from another a part of his property without com- 
pensation. While that court has uniformly decided that bonds 
obtained from counties, cities and towns, fraudulently and 
without consideration, must be paid, it decides that a retro- 
active statute may be passed which takes a man's property 
without consideration; and that congress, without any such 
power being conferred by the constitution, can substitute a new 
standard of values. Not only that congress can do this, but 
that the legal tender act extended beyond its plain reading, and 
made paper money, a thing that is of no intrinsic value, a 
legal tender for debts generally; that this paper was the standi 
ard of values, and that coin, gold and silver, were but articles 
of commerce, the value of which was fixed by this new paper 
standard. If one not learned in the law had been called upon 
to interpret the constitution, he would have arrived at a differ- 
ent conclusion. If ten years ago one learned in the law had 
been called upon to interpret the meaning of the constitutional 
provision above referred to, he would, without hesitation, have 
decided that such an act was unconstitutional. If the eminent 
jurists who graced the supreme bench at any time since the 
organization of our government had been required to decide 
as to the validity of the statute, or to construe its terms, or 
declare its meaning, a realizing sense of the obligation resting 



'•N- MO>Oll»LItS A>*D THE PBOPLB. 

. J »i ■ i i ; u 1 1 1 , uui of t he Jaugur of violating the provisions of 
'lu .on.^tiMiUuii* would have deterred them from making such 
I .iivl.>j\ui. Wlitiii, ill the winter of 1869, the question was 
iiffoiv ^iio i'uurt, upon careful examination, Chief Justice 
\.'liuM\ who wiifr the author of the statute under which the 
»|iusiioii irv»c.cs ="i*l f'^^r other judges, decided that it only 
4'pliid to voiitract6 made after its passage, and then only as a 
Will- luui^uit;. The supreme court of the United States declared 
ihiit the \v^[ ttjuder act had no retroactive operation, and 
ihtti, mulcr the constitution, it could not be extended beyond 
lib tA^ruic; that to extend it further would be a violation of 
the t'unuauieucal laws. Here the matter should have ended. 
I'liib vlecisiou was, and should have remained, final. But it 
ilid not mcuL the approval of corporation rings and Wall street 
i^amhiers. They demanded a difierent decision, and their 
tlwuand was i^ratitied. To obtain a reversal without a recon- 
■niruciioa of the court vras not expected. It was suddenly dis- 
.\>vcrcU that there was a necessity for an additional judge. 
I'hc ivaav^a u;ivt;u was, that an even number of judges might 
.U^ide, :uul uo decision could be rendered; hence the necessity 
«oi v»iu' Miore. It was known to them that one judge was 
I \»iii ^» •\'^i^n, and that one had concurred in the decision 
u;».. .} '\\K.-\ dcftircil rt» versed. Two judges were to be appointed. 
i \- ' vwiv ill favor of reversal, then live of the nine would 
4^1'. . A\<.T^iil. ^ We have referred to this matter beforehand 
\^ ? i.w :'or 14 purjH>se that will soon appear.) Two railrt>ad 
4'. .o. ik\r», Siivi\vj and Bradley, were recommended and ap- 
iK.Mivi 'vtoiv the close of the term of the court at which the 
'«^,i !v:jiU-r iUvi>ion had been rendered. Notice was at once 
..\»ji 'h.4! iIk" ici::jil tender case would again be presented to 
/u v». -i :*•■ I decision. It was announced, both W'fore and 
!v '.u- viK'intnient of Messrs. Strong and Hnidley, that 
■. \ »\v v o'MiiiiittiH.1 to a reversal of the leg*al tender decision. 
N''- ; ■ \; i\\v>K\frtf</i-nJff<//it rdUroiK] attoriuys had taken 
i\. , .»-, u'tK'ii tiie supreme bench, we find them redet»ming 
.: - ,^' > .J'' iVieni.s of a reversal claimed had l)een made, 
i;" ..... i- '.►•»i; ar:L;nments in favtir of a reversal of the 
ojs: i \'* v'.ict' Justice Chase and the four other eminent 



00N0LU8I0K. S88 

judges, in which argument they seem to disr^ard constitu- 
tional restrictions, and to apologize for the opinions they pro- 
nounced, declaring that treasury notes are a legal tender for 
all debts, save those that are excepted in favor of the govern- 
ment. Thus, by the appointment of two judges, understood 
to be pledged to the railroad interests, the supreme law of the 
United States makes paper "promises to pay " a legal tender 
when contracts call for money, fixes this kind of paper as the 
standard of values, and makes gold and silver coin articles of 
commerce, while at the same time the constitution makes emn 
a legal tender and the standard of values, and prohibits the 
states from making anything but coin a legal tender. To 
serve a particular interest and benefit railroad corporation^, 
the personal views of these two judges, approved by three 
others, became the supreme law of the lan(d> in disr^ard of the 
plain letter of the constitution, as well as the decisions of the 
same court upon the same statutes made but a few months 
before. 

We have been thus particular in referring to this decision, 
and the means used to procure it, for the purpose of showing 
that the idea of exacting pledges of men who are candidates 
for judicial position is not new, and that those who apparently 
look with alarm at what they are pleased to term an innovation 
upon long-established precedents, as well as an attempt to de- 
stroy the independence of the courts of the country, have them- 
selves been successfully practicing the same thing, and securing 
the election and appointment of judges whose views accorded 
-with their own. 

FoijRTH. — Judicial cmd Paaiiean Legislation Reviewed^ 
^nd a liernedy Suggested, — ^The consequence of special legis- 
lation in favor of railroad corporations, the granting of subsi- 
dies of land and bonds, is not what is claimed by the advocates 
,of such legislation. It has placed the whole producing inter- 
ests of the country at the mercy of soulless corporations. It 
has giv€» railroad corporations title to, and absolute control 
of, enougt^of the public land to make an empire of vast extent. 
Lands tJhiat^ff right belong to the people are owned by these 



984 MOMOFOLIBB AND THE PEOPLE. 

ooqxNrationA, and instead of the nominal price fixed by the 
government upon them, our pioneers, who settle and develop 
the ooimtry, must pay whatever sum is demanded by these 
oorporations, or content themselves with such lands as they 
can find in less derirable localities. 

It has given to railroad corporations the absolute control of 
the coal lauds of the country, so that in the fature, as well as 
at the present time, at all points where there is a scarcity of 
timber, the people are compelled to pay such prices as are, and 
in the ftiture will be, demanded of them or perish with cold. 

It has established an unequal and unjust system of taxation, 
by means of which corporations are relieved from the pay- 
ment of their just proportion of the public taxes. It sanctions 
and supports base frauds upon the public, in permitting oor- 
porations to add to their capital stock at pleasure, making the 
apparent cost of these roads much greater than they really are, 
and permitting them to extort from the people for transporta- 
tion of freights sufficient amounts to pay the interest and div- 
idends on this " watered stock." It has taken from the peo- 
ple the rights guaranteed to them by the constitution, and 
transferred their rights to railroad companies. These are a 
part of the evil consequences of partial and special legislation 
in favor of corporations; and they could be speedily remedied, 
but for the decisions of the courts. 

The^e decisions wc have noticed, and have shown that 
whatever may have been the intention of the courts rendering 
them, their tendency has been to strengthen and uphold the 
mighty )><)wer asserted by corporatious. Where conflicts have 
arisen l>etweey counties and municipalities on the one side, 
and tliese corporations on the other, the courts have treated 
these mil road companies as private corporations, and have de- 
cidcKl in their favor. When the majority of a legislature, be- 
lieving that corporations were subject to legislative control, 
have attenipteil to restrict their powers and correct their 
abuses, the courts have said their charters were in the nature 
of tH>ntraets, which the legislature could not alter or amend, 
and the pet>ple have been compelled to submit. When the 
question of the right to levy taxes for the purpose of building 



cxmcLUBOH. 986 

railroads is to be decided, another phase of the question ia 
presented. All the courts agree that taxes cannot be levied 
for a private purpose. The difficulty is met and overcome in 
this way. 

Fi/rst, — It is announced that railroad corporations have the 
right of eminent domain, that this right is an attribute of 
sovereignty; and for this reason they must be considered pub- 
lic corporations. We have referred to this already, but refer 
to it again for the purpose of showing that the argument is 
not sound. The right of public domain is possessed by the 
supreme power of the nation. It belongs to all governments. 
Of right it is not inherent in, nor can it be acquired by, any 
private person or corporation. If the right is ever exercised 
by any corporation, company, or Individ val, it must be by the 
permission of the governing power; in this country by legis- 
lative grant. If it belonged to corporations they could exer- 
cise it without any consent of the legislature. They could 
themselves decide how, when, and where they would exercise 
it. They could prescribe the mode of condemning the prop- 
erty of others to their own use, and no power in government 
could question their acts. It will not be contended that with- 
out special legislative enactment, railroad companies could ap- 
propriate the property of others for the purpose of building 
their roads upon it. All will agree that before they can do 
this, the legislature must confer the right upon them. Does 
the act of granting to corporations the right to build their 
roads through the property of others confer upon them any 
of the attributes of sovereignty? If so, the legislature pos- 
sesses the power of granting its attributes to corporations or to 
any private j^erson. It would be immaterial whether a single 
person, a company, or a corporation, desired to build a railroad. 
To make such person, company, or corporation a part of the 
government, the legislature need but delegate to the party de- 
siring to build a railroad the right of eminent domain; and 
from that moment the individual or corporation becomes a part 
of the government. A moment's reflection will convince the 
reader that the position is untenable. If one of the attributes 
of sovereignty can h^fcurmed out to railroad corporations, 



886 MONOFOLIEB AND THB PfiX>PLE. 

another can be to some other interest, and in process of time 
the government itself would become a mere skeleton, having 
delegated all its powers to private parties, remaining only a gov- 
ernment in name. From time immemorial, the legislature has 
granted to varions parties the same kinds of privileges that are 
granted to railroad companies; yet it never was, and is not 
now claimed, that because of snch grants, the parties obtaining 
them become public corporations, or that they were clothed 
with any of the attributes of sovereignty. Ferry companies, 
plank-road companies, and turnpike road companies, have 
been chartered with power to take the property of others, and 
place their ferries, buildings, and roads upon the property so 
taken, upon payment of the appraised value. In many of the 
states laws have 'been enacted under which private parties 
have been granted the same privilege. Persons building mills 
are permitted to construct dams across streams and appropri- 
ate such portions of the overflowed lands of adjoining owners 
to their own use, upon payment of its value as found by ap- 
praisers. A and B, and their associates, desire to build a 
mill; in the construction of their dam they cause the back- 
water to flood the land of C. Under the provisions of the 
statute a jury is called, who assess the value of the land of C so 
overflowed and appropriated by A and B. The mill is built 
for the accommodation of the public. All who desire to do so 
can take their grain to this mill and have it ground upon pay- 
ment of the required toll. The owners have, under the statute, 
the same right of eminent domain that is conferred upon rail- 
road companies; and their mill is used expressly for grinding for 
all who patronize it and pay the required toll. The owners of 
the railroad, and the owners of the mill alike, serve the public. 
Both do it for pecuniary consideration. Both have the same 
right of appropriating the property of others. Yet the rail- 
road, under the decision of the courts, is a public corporation* 
while the mill is a private one. The railroad corporation is 
clothed with one of the attributes of sovereignty, while the 
owners of the mill retain their character as a private corpora- 
tion. No good reason appears for this distinction. While we 
admit that the supreme court of the United States has decided 



OOVOLUSIOK. 287 

that because of the fiict of legislatures having granted to rail- 
road companies the right to appropriate the lands of other per- 
sons to be used as road-beds, they become public corporations, 
and that until reversed we must accept it as the law, we con- 
tend that as long as the railroads are owned and controlled by 
private parties, and their earnings are appropriated and used 
exclusively for private purposes, the facts are in direct conflict 
with the law as declared by the supreme court, and that either 
the facts or the law must be changed before they harmonize. 
Second. — It has also been decided by the courts that rail- 
roads are public highways (an absurdity on its face, that 
under the law railroads are public highways, while they are 
owned and controlled by private companies, who become 
public corporations because of one of the attributes of sover- 
eignty having been conferred upon them), and that, because 
they are public highways, taxes can be levied upon the people 
for building and repairing them. The fact being admitted 
that private parties own and control railroads; that the gov- 
ernment receives no part of their earnings, and that neither 
the government nor private persons can ride upon them with- 
out paying for the privilege, or procuring a pass, and that no 
freights can be shipped over them without payment of the 
amounts demanded, seems to conflict with the decisions of the 
courts. Under the decisions of the supreme court, the prop- 
erty of the citizen is taken from him without compensation, 
and bestowed upon a private corporation and, the plain 
provision of the constitution has received a new interpretation 
which compels the property owners to bestow a part of it on 
corporations without any consideration whatever. The situa- 
tion is about as follows: When a conflict arises between the 
people and railroad corporations, or when the legislature 
attempts to reform abuses practiced by them, the courts hold 
that railroad charters are in the nature of contracts, and that 
the legislature can neither alter, amend, or repeal them. The 
companies are then treated as private corporations. In proof 
of this look at the following decision, of recent date : 



y. A 



S88 MOiropoLiaB aitd thx people. 

^SUKKKMB OOIJBT OF THE UNITED STATEBL 

" Ths WUrmngtan <& Weldon Railroad Compcmy^ Plaintiff 
va error vs. John A. Reidj Sheriffs etc. In error to the 
Supreme CovH of the State of North Ccurol/ma. 

"Mr. Justice Davis delivered the opinion of the court: 
^ This is a writ of error to the supreme court of the state of 
North Carolina, and brings up the question whether the recent 
legislation of the state, concerning the collection of taxes, is, 
as it affects the plaintiff in error, in violation of that providon 
of the constitution of the United States which declares that no 
state shall pass any law impairing the obligation of oontraets. 
As early as 1833, the general assembly of North Carolina 
incorporated the Wilmington & Weldon railroad company, for 
the purpose of constructing a railroad in the state, and inserted 
a provision in the charter ^ that the property of said company, 
and the shares tlierein, shall be exempted from any pubUc 
charge or tax whatsoever.' It has been so often decided by 
this court that a charter of incorporation granted by a state 
creates a contract between the state and the corporators which 
the state cannot violate, that it would be a work of supereroga- 
tion to repeat the reasons on which the argument is founded. 
It IB true that when a corporation claims an exemption from 
taxation, it must show that the power to tax has been clearly 
relinquished by the state, and if there be a reasonable doubt 
about this having been done, that doubt must be solved in 
favor of the state. (The Binghampton Bridge Case, 3 Wallace.) 
If, however, the contract is plain and unambiguous, and the 
meaning of the parties to it can be clearly ascertained, it is the 
duty of the court to give effect to it, the same as if it were a 
contract between private persons, without regard to its sup- 
posed injurious effects upon the public interests. 

" It may be conceded that it were better for the interests of 
the state that the tax -paying power, which is one of the highest 
and most important attributes of sovereignty, should on no 
occasion be surrendered. In the nature of things, the necessi- 
ties of the government cannot always be foreseen, and in the 



ooofOLDaoH. S89 

changes of time the ability to raise reyenne firom every spedes 
of property may be of vital importance to the state, but the 
courts of the country are not the proper tribunals to apply the 
corrective to improvident legislation of this character. K 
there be no constitutional restraint on the action of the legis- 
lature on this subject, there is no remedy except through the 
influence of a wise public sentiment, readiing and controlling 
the conduct of the law-making power. 

" There is no difliculty whatever in this case. The general 
assembly of North Carolina told the Wilmington & Weldon 
railroad ^company, in language which no one can misunder- 
stand, that if they would complete the work of internal 
improvement for which they were incorporated, their property 
and the shares of their stockholders should be forever exempt 
from taxation. This is not denied, but it is contended that 
the subsequent legislation does not impair the obligation of 
the contract, and this presents the only question in the case. 
The taxes imposed are upon the franchise and rolling stock 
of the company, and upon lots of land appurtenant to and 
forming part of the property of the company, and necessary 
to be used in the successful operation of its business. It cer- 
tainly requires no argument to show that a railroad corpora- 
tion cannot perform the functions for which it was created 
without owning rolling stock and a limited quantity of real 
estate, and that these are embraced in the general term 
property. Property is a word of large import, and, in its 
application to this company, included all the real and personal 
estate required by it for the successfiil prosecution of its busi- 
ness. If it had appeared that the company had acquired 
either real or personal estate beyond its Intimate wants, it 
is very clear that such acquisitions would not be within the 
protection of the contract. But no such case has arisen, and 
we are only called upon to decide upon the case made by the 
record, which shows plainly enough that the company has not 
undertaken to abuse the favor of the legislature. 

^' It is insisted, however, that the tax on the franchise is 
something entirely distinct from the property of the corpora- 
tion, and that the legislature, therefore, was not inhibited from 
19 



S90 MONOFOLIEB AND THE FBOFLB. 

taxing it. This poflition is equally ansound with the otlien 
taken in this case. Ifothing is better settled than that the 
franchise of a private corporation — which, in its application 
to a railroad, is the privilege of running it and taking fare and 
freight — is property, and of the most valpable kind, as it 
cannot be taken for public use even, without compensation. 
(Bedfield on Eailways, p. 129, Sec. 70.) It is true it is not the 
same sort of property as the rolling stock, road-bed, and depot 
grounds, but it is equally with them covered by the general 
term, * the property of the company,' and, therefore, equally 
within the protection of the charter. 

^^ It is needless to argue the question further. It is dear 
that the legislation in controversy did impair the obligation 
of the contract which the general assembly of North Carolina 
made with the plaintiff in error, and it follows that the judg> 
ment of the supreme court must be reversed. It is so ordered, 
and the cause is remanded for further proceedings, in con- 
formity with this opinion. 

"D. W. MiDDLETOH, 

"O.S.O.U.a'' 

When the question of the right to levy taxes upon the peo- 
ple for the purpose of building railroads, is before the courts, 
they decide that such right exists: First, because the right of 
eminent domain has been conferred upon the company; and, 
second, because the railroads are public highways; so, that in 
every phase the question assumes, tlie decisions of the courts 
are in favor of these corporations, and adverse to the people. 

Notwithstanding the fact that the decisions of the courts fix 
the status of the railroad corporations as public in their 
nature, the real fact remains that railroads are owned and con- 
trolled by private parties, and it is a mere fiction of law to 
call them public; and while we accept the decisions as law, the 
facts are unchanged. The effect of the legislation to which we 
have referred is apparent to aD. It has strengthened corpora- 
tions, enlarged their powers, and constantly encroaches upon 
the rights of the people. So great has this evil become that 
almost the entire population of the country, not under the 



OQNOLUHIOH. S91 

control of or interested in railroad corporations, are demanding 
a change of legislation, and relief from the oppressions heaped 
upon them by these monopolies. 

But the injuries inflicted upon the people by the decisions 
of the courts are far greater than those resulting from legisla- 
tion. By the decisions of the supreme court of the United 
States, the distinction between public and private rights has 
been obliterated; the constitution of the country has become 
of no more binding force than statute laws. State statutes 
and the decisions of state courts have been overridden and 
annulled where the interests of corporations wereto be sub- 
served; the settled decisions of the same court have been over- 
ruled, and a new doctrine, in conflict with the settied interpre- 
tation of the fundamental law of the land, has been announced, 
which makes the people the vassals of railroad corporations. 
The rights of the people and the states have been disregarded, 
and the edicts of the supreme court have been substituted for 
constitutional law. By the decree of that court, railroad cor- 
porations are clothed with the attributes of sovereignty, and 
the people are compelled to pay taxes to aid in the construction 
of their roads. That court has engaged in judicial legislation, 
and fastened upon the people a despotic government, with rail- 
road corporations as their rulers. If it be true that railroad 
corporations are public and not private, they are not subject to 
the control of state courts or state legislatures. They are not 
by their charters, or the powers derived from l^slative 
grants, made public corporations, and if they are public, they 
are made so by the decisions of the supreme court, or by some 
assumed power not visible to the public eye. It is contended 
by some, that if it is fally established that they are public 
corporations, the state legislatures and the state courts can 
regulate and control them. Is this sot Will not that fact 
take from the states all jurisdiction over them? The decision 
making railroad corporations public, also makes their roads 
public highways extending throughout the country. It is 
claimed that the general government, having power to regu- 
late commerce between the states, can take control of all the 
ndlroada in the United States. No power is conferred upon 



S98 MONOFOrJlBS AND THK PEOPLE. 

•tate legiBlatnreB, in many of the states, to grant charters to rail- 
road companies, conferring npon them any sovereign powers. 
And by the constitutions of some of the states they are 
deprived of the power of aiding in any works of internal 
improvement. As a consequence, there could not be uniform 
l^slation among the states in relation to railroads. Being 
public highvirays, and the corporations being also public, the 
power of r^ulating and controlling them, and preventing dis- 
crimination among the states, would belong to the general 
government, and these powerftil corporations, chartered by the 
Btate in which they are located, could defy state authority. 
With a congress composed of their friends, and a supreme, 
court already committed to their interests, the people would be 
powerless. . But on the other hand, if (as we insist is the fact) 
railroad companies are private corporations, then they are 
within the jurisdiction, and subject to the control of, the 
authorities of the states in which they are located. This we 
insist is the true status of railroad corporations, and the courts, 
by their decisions, cannot change this character. The decisions 
of the courts of the different states and of the nation have not 
been of a character to command the respect of the people, and 
unless we accept the last edict of the supreme court of the 
nation, as the supreme law of the land, and admit that it 
supersedes the constitutions and statutes of the states, as well 
as the decisions of the state courts, it is difficult to determine 
the character of railroad corporations and their relations to the 
people. Accepting that decision as final, the constitution of 
the United States is but of small value, and state governments 
are of but little benefit to the people. Upon the various ques- 
tions that have arisen in connection with the construction of 
railroads, and the rights of the people, and railroad corporations 
respectively, there has been sncli confusion in the decisions of 
the courts, as well as contradiction, reversals, and overruh'ngs 
that there now exists a necessity for the regular issue of a 
judicial bulletin, like the market reports, that the people may 
know what is the latest interpretation of the constitution. By 
the supreme court of the state of Iowa, it was decided to be 
constitutional for counties and cities to subscribe stock to rail- 



OONGLUSIOS. 998 

road oompanies, and that there was a statute authorizing Buch 
subscriptions. By the same court it was decided, OTerruling 
the above named decision, that the constitution did not confer 
the power to subscribe stock to raihx>ad companies, and that 
there was no law of the state authorizing such subscription. 
The whole matter arose under the constitution and laws of the 
state. The supreme court of the United States overruled this 
last decision of the state courts, and decided that such sub- 
scription was constitutional and was authorized by the laws of 
the state. The courts of the states of Pennsylvania, Illinois^ 
Indiana, Wisconsin, Missouri, and others, made like decisions, 
and the supreme court of the United States overruled them. 
The legislatures of some of the states — Iowa, Wisconsin, and 
Michigan included — passed statutes authorizing local aid in 
shape of tax to be voted to railroad companies. The supreme 
courts of these states decided that the statutes were unconsti- 
tutional, and within fifteen months thereafter the supreme 
court of Iowa decided that the Iowa act was constitutionaL 
Like decisions were made in some of the other states. In 
Wisconsin the state courts decided the act was unconstitutional, 
and the supremje court of the United States overruled that 
decision and decided the act was constitutional. Some of the 
state courts hold that railroad corporations are private, whilst 
others decide that they are public The supreme court of the 
United States, by its decisions, clothes them with one of the 
attributes of sovereignty, and declares that under the law they 
are public cctrporations, and that their roads are public high- 
ways. The same court, upon the legal tender issues, decided 
that treasury notes were not legal tender for debts contracted 
before the enactment of the statute providing for their issue. 
In a few months after that decision was made, and after the 
friends of railroad corporations had so reconstructed the court 
as to have a majority of the court in favor of a re-hearing of 
the question, the same high covrt decided that treasury notes 
were not legal tender for all debts (save those excepted by the 
statutes,) but that they were the standard of values. In all of 
the above decisions made by the supreme court of the nation, 
either reversing the decisions of the state courts, or reversing 



994 MONOFOUEB ANI» THE PEOPLE. 

and overruling its own decisions, snch reversals and overrol* ^ 
ings were in favor of the corporations and against the people. 
When coarts, whose dnty it is to declare the law and interpret 
the constitution, differ so widely and change so often, it is not 
strange that the people should begin to look with suspicion 
upon, and doubt the binding force of, these decisions; and 
when it is received as a truth, that in the appointment of 
judges care was taken to select men who were pledged to 
decide important issues then pending, in accordance with the 
interests and expressed wishes of railroad companies, it wiU 
not appear strange that the people, before voting for a judge, 
should demand of him a pledge in favor of measures advocated 
by them, or that he at least should pledge himself to abstain 
from judicial legislation and from twisting the meaning of the 
constitution to suit the views of the monopolists who are 
already clothed with too much power. If it is important 
that men elected to congress and state legislatures should be 
in sympathy with the people in their struggle to regain their 
rights, now usurped by the different monopolies of the country; 
and if it is necessary that the executive departments of the 
state and national government should be filled with men who 
are friends of the people and in favor of restricting corpora- 
tions within proper and legitimate bounds, — it is of vastly 
more importance thaf the seats of justice, the courts of the 
country, should be filled and controlled by men who, instead 
of deciding cases according to their own personal views of 
what the constitution ought to be, will accept in letter and 
spirit as it is, and decide accordingly. An inordinate desire 
to interpret the fundamental law, to give it a new meaning, or, 
as it is commonly expressed, for amending the constitution by 
judicial legislation, seems to have seized the courts, and has ^ 
been followed to such length as to make it almost impossible 
for even the courts themselves to decide when an act is consti- 
tutional and when it is not. A new decision is made as often 
as a new judge is appointed, not unfrequently overruling the 
long settled decisions of the courts. These decisions, no matter 
how absurd or unjust, must be accepted by the whole country 
as the supreme law of the land. Of late years, by accident or 



OQNCJLUfilOlS. 385 

design, most of the decisions on questions ot a general nature 
have been adverse to the interests of the people, and in fitvor 
of monopolies. Newly appointed judges, scarcely warm in 
their seats, have not hesitated to overrule the decisions of 
" Marshall," of " Story," and " Chase;" to disregard the views 
of "Webster," of "Adams," of "Jefferson," of "Washing- 
ton," and "Hamilton," on constitutional questions. Their 
own personal views have been substituted for constitutional 
law, until the protection that instrument is supposed to afford 
the private citizen is entirely destroyed, and the absolute con- 
trol of the government is transferred to the few monopolists, 
who, under the sanction of the courts, oppress the whole people. 
Whatever reform may be effected in the legislative and execu- 
tive departments of the government, no real reform can obtain 
without a reformation of the courts. 

Fifth. — The effect of the Legal Tender Decmony a/nd «te 
Antidote. — The power of congress to issue treasury notes and 
government paper as a war measure, is not denied. The 
authority or the right, under the constitution, to make govern- 
ment promises to pay (treasury notes) legal tender, is not 
admitted. We have Jready treated of the legal tender decis- 
ions; of the reconstruction of the court, and the means used 
to secure the appointment of judges to insure a majority in 
favor of the validity of the legal tender act, and its general 
application to all debts save those excepted in the act, no 
matter at what time they were contracted. We recur to this 
subject again for the purpose of showing its effect upon the 
financial interests of the country. Whatever may have been 
the views of congress in passing the act, or of the court in de- 
claring it constitutional, it has proved destructive of the inter- 
ests of the people, and of great benefit to the corporate 
oligarchy that now rules the country. Whatever may have 
been the views of a majority of the court, or the motives that 
prompted and controlled that majority in rendering the legal 
tender decisions, these decisions have proved disastrous to die 
interests of the people, and added greatly to the already great 
power of corporations and Wall street speculators. In our 



SW6 MONOFOLTES AND THE PEOPLE. 

commerce with foreign nations we are obliged to use Ttumtm/ or 
its equivalent. While the acts of congress and the dedsions 
of the courts may make treasury notes legal tender for all 
domestic debts, and all foreign debts payable in this couotrfy 
neither the acts of congress nor the decision of courts can have 
any power or (Controlling influence over other nations. Debts 
due from us payable in foreign countries must be paid in coin 
or its equivalent Our governmental promises to pay will not 
pass current as money in foreign countries, even though 
accompanied and supported by the decision of the supreme 
court, deciding that they are to be received by us as legal 
tender in all of our transactions. Ko one will daim that 
treasury notes are money, or that they are of intrinsic value. 
It is because the government is pledged to redeem this dass 
of paper with coin that it has a market value. All other 
nations recognize coin — gold and silver — as the measure of 
values. It is the standard for all other articles of barter or 
sale. It is money. All other issues are but the representa- 
tives of money. Debts due from us, payable in foreign 
countries, must be paid in money; legal tender will not. answer. 
But if debts due us from persons residing in other countries 
are to be paid here, the debtors can take their money, buy our 
legal tenders at a discount of fifteen or twent}' dollars to the 
hundred, and discharge their debts, saving for themselves the 
difference between coin and paper. The confidence we have in 
the promises of the government to redeem in coin is all that 
makes treasury notes pass current, or gives them a market 
value. 

The hope of an early resumption of specie payment is blasted 
by the legal tender decision. Its effect is to drain the United 
States of coin in our commerce with foreign nations, thus 
making it impossible to resume. Our coin grows less from day 
to day, and the secretary of the treasury is obliged to sell gold 
in New York at short intervals and in large amounts, in order 
to prevent the Wall street brokers making a margin of twenty- 
five per cent, or more between coin and government paper. 
While stock-jobbers and gold brokers make large profits in the 
appredated price of gold; and railroad companies, in paying 



00N0LT7SION. 99T 

their bonds, make a net gain to the amount of the difference 
in yalae between gold and legal tender currency, the farmers 
and producers suffer loss to the amount of this difference in 
disposing of their products. When wheat is sold for one dollar 
per bushel, the seller gets but eighty-four cents, or just the 
value of treasury notes, and not one dollar in money, as he 
imagines, because the dollar he gets has no intrinsic value, but 
sells at its market worth, coin being the standard of values. 

Another result of the legal tender decision is to make the 
value of tarm products dependent upon the operations of Wall 
street sharpers. Legal tenders are the standard of values, says 
the court; coin and all marketable articles have their values 
measured by treasury notes. The price of treasury notes fluctu^ 
ates. This fluctuation is not caused by any real change in the 
relative value of coin and treasury notes, but results from the 
dealings and operations in Wall street. If the ^^ bull " oomor 
gold, its value rises, or, more properly speaking, treasury notes 
depreciate in value. When the ^^ bears" control the market, 
the price of treasury notes advances. This legal measure of 
values is constantly changing, and with its rise and fall the 
prices of western products also rise or fiEJl. Bailroads, railroad 
stocks and bonds, and the currency of the country, as well as 
the coin are all under the control of Wall street operators, and 
as long as treasury notes are treated as legal tender, these same 
operators will control the markets of the whole country. 

The legal tender acts and decisions in effect, provide an irre- 
deemable paper currency for the people, and coin for the gov- 
emment. Duties on imports must be paid in coin. Wall 
street brokers have the coin of the country cornered; the im- 
porter must buy it of them; he pays it to the government; 
government sells it to the broker, and he again sells it to the 
importer. It cannot get into general -use, because the brokers 
preserve so great a margin between gold and paper as to drive 
all coin from circulation. They monopolize the gold market; 
and, under the legal tender decision, control the money market 
o^ the whole country. This state of things must continue 
until the legal tender act is repealed, or the decisions of the 
supreme court are reversed. 



S98 MONOPOLIES AND THE PBOFLX. 

It is contended that gold and silver have no property value, 
beyond their utility as material for plate and ornament; that 
their money value is not inherent in the metal, but depends 
upon the custom and law of nations; that the money power of 
coin is lawy and that it can be just as forcibly imparted to 
paper as to t^e precious metals; that the ignorance of the 
people and the selfishness of financiers alone prevent this 
money value being imparted to paper; that this value has been 
imparted to treasury notes by act of congress, and decisions of 
the supreme court. Is all this true? We admit that oongress 
has atteihpted to stamp paper with an intrinsic value, but we 
say that this effort has proved*a failure. So far from it having 
a money value, it has only a marketable value, measured by the 
money standard — the standard of all values, to-wit: the precious 
metals. Gold and silver have an intrinsic value, the same as 
all other metals, the difference being that their value is greater 
than that of any other metal, because of their scarcity. For 
this reason coin has been accepted by all civilized nations as 
the measure of all values. It is the universal standard. The 
attempt to make paper promises to pay a legal standard of 
values is Utopian. The theory of imparting to it an actual, 
stable, money value is fallacious. No decision of any court in 
the world can make paper ciirrencv of the same uniform value 
as coin, or prevent its fluctuation in price. It will rise and fall 
in market the same as wheat, cx)tton, iron, and all other articles 
of trade, sale, or barter. While coin retains its uniform value, 
which can only be changed by act of the government, its price 
neither increases nor diminishes in the market, but remains the 
standard by which all other values are measured. 

The government cannot control the value of paper. The 
laws of trade — of demand and supply — fix its value the same 
as they fix the value of any other marketable commodity. If 
government possesses the power to make its paper legal tender 
for all purposes, it has also the power to fix the amount of this 
legal tender, or paper rru)iuy used by the people for the trans- 
acting of all the business of the country. Having made it 
impossible to return to specie payments, and forced the people 
to use as money a currency which all other nations refuse to 



OONGLUSION. S99 

accept as money, the amount of this depreciated paper — this 
legal tender — can be arbitrarily increased until ten dollars of 
it would not purchase one coin dollar. Or it could reduce the 
volume of this legal tender until the people would be virtually 
without money or its representative. The whole business of 
the country would be dependent on the views of the majority 
of the congressmen — of congressmen, be it remember^, too 
often influenced by the different monopolies of which we have 
been treating. The majority of congress at one session may 
favor a large issue of legal tender paper, and the majority in 
the next congress may favor a limited issue — thus destroying 
stability and confidence in business, and giving the " bulls *' 
and '^ bears " the absolute control of the trade and finances of 
the whole country. The arbitrary power of fixing the amount 
of money graciously allowed to the people by their rulers is as 
unalterably vested in congress, as it is in any of the rulers of 
the old world. The legal tender decisions say in substance: 
You shall not have coin as a circulating medium, nor ^shall you 
have legal tender or government currency save in such amounts 
as your rulers shall see proper to vote to you. When it is 
remembered that giant corporations and Wall street brokers 
can at their pleasure withhold from the business men and pro- 
ducers just such portions of the paper money of the country 
as suits their purposes of speculation and extortion, and can 
cfomer all the coin in the land, and dictate to the secretary of 
the national treasury the financial policy of the government, 
as they have done for the last few years, we can, to some extent, 
at least, appreciate the bad results of the legal tender decisions. 
The present banking system of the country rs anti-republican ; 
it tends to a centralization of the finances of the country in 
corporations; but the legal tender decisions, because of the 
undisputed control they give to combined and concentrated 
capital in the hands of railroad corporations, and other combi- 
nations whose interests are at war with those of the people, 
have done more to reduce the people to a state of servitude 
than all the acts of congress and legislatures united. With 
the amount of currency hmited; specie payment rendered im- 
possible; the control of the finances of the countiy vested by 



MO 



HONOFOim AKD THE FBOFLB. 



hw in one man— tibe secsretary of the treasury; the imiiMifif^ 
wealth and power of railroad oompanies, brokers, and stoek- 
jobbers, reoognLeed and feared by him — ^whfle they control the 
oommerce of the oonntry, and fix the valne of its prodneta; 
the people oppressed with unjust and unequal burdens imposed 
upon them by bad and unconstitutional legislation — ^the supremo 
court of the nation, with all these facts in view, has, by its de- 
dsions, made it possible for these oppressors of the people to 
control the destinies of the nation, and to despoil and rob tibem, 
not only of their property, but of all the republican fiMitares 
of their government. 

We have argued that these decisions were unoonstitationaL 
In support of this position, we refer the reader to the appendix 
to this work. If the power of the monopolists is now so 
great as to rule the country, shape legislation, reform the courts 
in their interests, and secure unconstitutional deeisiona in 
Hieir favor from the supreme court of the nation, overruling 
the long-settled policy of the country, and substituting treasury ' 
notes for money, that the sellers of bonds, stocks, and corporate 
diares may repudiate their mon^ contracts, and make large 
gains by so doing; while the same courts, with a dread of the 
disgrace which follows repudiation, destroy state constitutions 
and state statutes, and disregard the decisions of state courts, 
to compel the people to pay these giant monopolies money 
claimed by them on contracts obtained by fraud, and which 
the people did not owe — with this frighful aspect before us, we 
have reason to be alarmed for the safety of our rights, as well 
as to fear for the perpetuity of our republican government. 

The imagination cannot devise a more perfect system for the 
subjection of the best interests of the people to the control of 
railroad and moneyed corporations and companies, and Wall 
street brokers and gamblers. It needed but the legal tender 
decision to make it perfect; to subject the whole country to 
the rule of rings and combinations of unscrupulous and dis- 
honest men ; to reduce the people to a state of vassalage more 
degrading than that of the Eussian serfs. In name we are a 
free people, protected by the constitution of our country; in 
tByct we are the servants of these giant monopolies. We retain 



OONOLU8ION. 801 

of the proceeds of our labor such portion as they graciously 
permit us to keep. With the congress of the United States, 
and the legislatures of most of the states, committed to their 
interests, and the supreme court of the nation issuing its edicts 
in their favor, they can defy the people and continue their 
oppressions. 

Sixth. — Popula/r Measure of Relief Discussed — The 
Nat^i/re of the Reform Needed. — ^We recognize no higher 
human power than the will of the people. When the servants 
of the people, elected and appointed to represent their interests 
in legislative bodies, or to decide upon questions affecting pub- 
lic interests, prove recreant to the trusts and interests confided 
to them, the people — the sovereign power — can remove them 
in the method provided by the fimdamental law, or, if this 
cannot be effected, then the people have the right, the Ood> 
given right, to resort to nature's first law for self-preservation. 
If by legislation the rights of the people are taken from them, 
then that power, retained by the whole people to be exercised 
when their rights are refused them — that power which is inhe- 
rent in the supreme rulers of our country — can be exercised. 
Under our system of government it should not be asserted save 
in the last extremity. When all other means fail — when 
redress can be obtained in no other way — then the people, as 
supreme rulers, should arise in their majesty, and, by the exer- 
cise of their reserved rights, take what their servants have 
denied them. As a people we liave not yet reached the point 
which would justify extreme measures. While the different 
monopolies of which we have been treating, by their shrewd 
management, by the use of their money, and by concert of 
action, have obtained almost unlimited control of all the 
departments of the government, numerically they comprise 
but a small part of the population of the country. Tlieir suc- 
cess is to be attributed to two causes : their systematic organi- 
zation, and their unlimited control of the finances of the coun- 
try. We might add, as a further cause of their success, the 
inattention of a large majority of the people to the political 
affidrs of the country, and their willingness to follow a few 



SOS MONOFOLUB AMD THX PBOPLB. 

political leoden, to whom they Beem to have intnuited the 
mitire control of the politics of the country. As a nil% we 
snbroit to wrongs in the administration of tibe aflairs of state^ 
as well as the national government, nntil we individnally snffisr 
from tlidr mal-administration; then what has been terined the 
^ sober second thought of the people" manifests itself and 
reforms are eflfected. The situation of the afiairs of the nation, 
and the great power that the monopolists have obtained in the 
land, have aroused that ^ sober second thought," and never in 
the history of our government has there been more nigent 
need of action on the part of the peopla Never were issues 
presented that demanded more earnestly the united effi>rts of 
an who love and prize constitutional liberty. The evils "tif 
which we have been treating can be remedied by demanding 
of all who fill official positions a recognition of the supericMr 
binding force of the constitution. It is not to be expected 
that those men filling official places in the legislative and judi- 
cial departments of the government, who, from interest and 
custom, have become addicted to the habit of giving new 
meanings and interpretations to the constitution, will reform 
the abases that have been rapidly accumulating, or that they 
will manifest any zeal or alacrity in stripping the railroad cor- 
porations and other monopolies of the great powers conferred 
upon them, or that any real reformation can be eifected with- 
out a thorough change of public servants. No matter what 
political party has control of the government, or to what party 
the men selected to fill the different ofiices belong, or with what 
political organizations they affiliate, nnless they acknowledge 
the superior binding force of the fundamental law, they should 
be requested to vacate their official positions, and their places 
should be filled by men who are willing to acknowledge the 
binding force of the constitution, and will pledge themselves 
to abstain from judicial legislation. Men elected to congress 
and state legislatures are the servants of the people, elected to 
protect their interests ; hence their will should control the 
action of members of congress and state legislatures. Being 
elected to serve the people, and not to promote selfish interests 
or support class legislation, the people, before supporting any 



ooNOLusioir. 808 

candidate for a legislative oiBce, should demand of him a 
pledge to labor for and support only such measures as will 
tend to a restoration of the rights that have been taken from 
and denied to them, and by special charters and grants con* 
ferred upon corporations and other monopolies. Eailroad cor- 
porations being created by legislative grants, their business 
being that of common carriers for hire, the legislature possesses 
full power to enact such laws as will limit and restrict their 
charges for transportation to a reasonable tariff, prohibit and 
punish extortions and unjust discriminations, and provide for 
the swift infliction of penalties whenever the laws are violated. 
Before the people elect any man to a legislative office he should 
pledge himself to support and obey the requirements of the 
constitution, and to abstain from that bane of a republican 
government — special class legislation. By supporting only 
such men as would, in good faith, pledge themselves as above 
suggested, and who, as legislators, would abide by their 
pledges, unjust discriminations would cease, and some of the 
rights of the people would be restored. But reforms must 
extend beyond the points named. Railroad companies being 
chartered and railroads constructed for the prosecution of the 
business of common carriers, having received aid in lands and 
bonds from the general government, and from states, coimties, 
cities and towns, bonds and taxes, as well as special privileges 
not granted to any other corporations, in contemplation of 
law, these companies are bound to act honestly. It was never 
the intent of the legislatures (if they acted in good faith) to 
create these powerful corporations, to grant them extraordi- 
nary aid and privileges, and then allow them, by false and 
fictitious reports as to the cost of their roads, to chargejunjust 
prices for carrying freights and passengers. By the watering 
process to which we have referred, the pretended cost of the 
roads, as shown from their reports, is often two or three times 
the actual cost, and the rates that are charged for transporta- 
tion are such as to pay dividends not only on the cost of the 
road, but on the fictitious or added stock. Indeed, in many 
cases the stock reported as paid up is not paid in a legiti- 
mate manner; but when the company is organized, by selling 



804 MONOPOLIES A2n> THE PEOPLE. 

bonds it builds its road from the proceeds, and from the < 
ing of the road pays not only the interest on its bonda bnt 
acenmulates i surplus. This surplus is divided among tbe 
stockholders — not as dividends on their paid-up stock, but la 
capitalized and stock issued to subscribers. The road ia made 
to pay the interest, and eventually the principal, of the capital 
borrowed to build it, and also to earn money enough to ahow 
a paid-up capital to the amount of the actual cost of the road. 
This species of financiering on the part of the company ia 
robbing the people and abusing the privileges conferred by 
the charter. No thorough reform of the abuses practices l^ 
railroad companies can be effected until the legislatures, by 
statutes, compel each and every company to purge its stock of 
every spurious dollar, so that the stock of each company shall 
not appear to be in excess of the cost of its road. If the legis- 
lature does not possess the power to do this, then it has the 
power to create a corporation that, by arbitrarily increasing its 
stock to any amount it may choose, can extort from the people 
sufficient to pay the interest upon such amount, and defy the 
power of its creator. Tlie position is not sound. Any and all 
abuses practiced by railroad corporations can be corrected by 
legislative enactmeut, unless we admit that the creature is 
greater than the creator. 

But it is claimed that if the legislature should by statute 
compel railroad companies to reduce their stock to the cost of 
constructing their roads, or to their actual value, and then 
limit their tariff of charges to reasonable rates, great injustice 
would be done the innocent holders of their bonds; that such 
reduction would render it impossible for them to pay either the 
interest or principal of these bonds; that such statutes would 
impair the obligations of contracts; that many of the bonds 
are held by widows and orphans, who would be ruined. This 
may or may not be true. If true, who is responsible for it I 
Certainly not the states or the people. Originally the bonds 
were purchased of the railroad companies. If these companies 
by false representations have obtained credit on their roads to 
two or three times their actual value, the companies are the 
responsible parties, and not the public. Wliile innocent per- 



cxnrcz^iTBioH. SOS 

Bona maj Buffer, their suffering results from their own impru- 
dence, or it is a misfortune occasioned bj the fraud of the 
raiboad company. There is no justice in allowing these com- 
panies to extort from the people money suflBcient to Relieve 
themselves from the consequences of their frauds. A owns a 
farm worth $2,000; he represents it to be worth $6,000, and 
by reason of this false representation obtains from B a loan 
of $4,000, secured by a mortgage on this farm. He fails to 
pay the money borrowed, and B forecloses his mortgage, and 
seUs the farm. It pays but one-half his judgment or decree. 
Would B have any claim upon the public for the balance of 
his debt ? He made his own contract, and expected a profit 
on his investment, but was disappointed. Under the law A 
had full authority to mortgage his land, and B had the option 
of loaning his money to A and taking a mortgage. He acted 
in good faith, and believed his security was ample, but was 
mistaken. Is there any difference in principle between the 
case of A and B and the purchasers of railroad bonds ? Both 
parties will suffer loss because of the fraud of the party with 
whom they dealt. Neither have any claim upon the public in 
law or in equity, and both must look to the parties with whom 
they contracted. The charters to railroad companies empow- 
ered them to transact business, but did not empower them to 
commit frauds, by mortgaging their roads for three times their 
actual value. To require railroad companies to act honestly 
and charge reasonable rates for carrying freights, does not 
impair the obligations of any contract. Nor does it, to compel 
them to reduce. their stock to what it actually should be, 
measured by the value of their roads. The legislature should 
be composed of men who are not embarrassed by personal 
interest, and who have not received bribes. We do not claim 
that because of the fact that men are stockholders or directors 
in railroad companies they are disqualified for seats in the leg- 
islatures of states, or of congress. But do insist that when men 
are elected for the express purpose of advocating the increase 
of the already too great powers and privileges conferred upon 
corporations, they prostitute their offices to base and illegiti- 
mate purposes. When the sole aim of men elected to repre- . 
SO 



t06 MOVOFOLDB ASD THB FBaPLK. 



sent the people is demonstrated to be to defeat evety 
designed to leUeve them from the effect of unjust laws aad to 
oonect abuses practiced by the combined influence of ooipoi»- 
tionSflthey dishonor the place they filL The rights of the 
people can be neither restored or preserved, until legislatures 
axe purged of this class of men. Men who reoeive any remu- 
neration from any man, dass of men, or corporations, paid or 
bestowed for the purpose of securing friendly legislation, are 
unfit to represent the people. It makes no difference whether 
the consideration is paid in money, or in pcuses aver the rmU' 
roads — ^it is given as a bribe. Passes are called complimentaxy; 
they are accepted as complimentary, yet it is a fact that these 
complimentary passes are placed where they ^^ will do the most 
good." They are given to congressmen, legislators, judges of 
courts, and executive officers. If it were necessary to olBEer 
proof that these passes were intended as bribes, we need only 
look at the manner of their distribution to the members <^ 
the kst Iowa legislature. They were distributed among those 
friendly to legislation in favor of railroads, and withheld from 
those opposed to such legislation. If passes are purely com- 
plimentary, this was wrong; but if they are given as bribes it 
was the proper distribution of them. The legislator who 
accepts a pass, and the party giving it, should be punished 
under the provisions of the statutes against ^^ bribery and cor- 
ruption in office." And the provisions of the same statutes 
ought to be enforced against all persons holding official posi- 
tions in the states, and in the general government. If officers 
cannot afford to pay for travel over railroads pn their present 
salaries, increase them so as to make them independent of 
railroad companies, who estimate official integrity as being 
equal in value to a pass over their respective roads. History 
demonstrates that in some cases these passes have been received 
as fall consideration for official influence. Legislatures possess 
the power to regulate and control railroad companies, and 
should exercise that power in every case of abase of their 
privileges by the railroad companies. Some deny th^ power 
of legislatures to compel railroad companies to reduce their 
stock to the actual cost of their roads. This power is lodged 



ooHOLUBiair. SOT 

in some department of government. We are not prepared to 
admit that these corporations are supreme; that thej can 
openly, and in defiance of law, and the rights of the governing 
power, practice frauds, which, if practiced bj an individual^ 
would consign him to prison. K the legislature does not 
possess it, the courts certainly do, as we will hereafter demon- 
strate. We have shown that by the manner of building roads 
with borrowed capital obtained by sale of bonds, and by extor- 
tionate charges for transportation, making their roads earn 
sufficient to pay dividends on stock which had not been paid, 
as well as on the watered stock, the railroad companies in the 
United States whose roads cost $2,456,230,000, yet in fact 
representing the enormous sum of $6,236,638,749, in what 
purports to be paid-up capital stock, and bonds, were robbing 
the people. 

The question we are now discussing is, How to remedy these 
evils. Our attempt thus far has been to demonstrate the fact 
that the remedy is exclusively within the state authorities, and 
not in those of the United States, and that railroad companies 
are private, and not public. Adhering to these views, we con- 
tend that railroad companies are subject to taxation at the 
same rate on the assessed value of their property as an indi- 
vidual; and the legislature cannot adopt a different rule for 
taxing railroad property without disregarding the letter and 
spirit of the constitution. The chartering, regulating, and 
controlling of railroad companies, and all corporations created 
for pecuniary profit, must remain with the states. To concede 
the exercise of this power to the national administration is to 
overturn republican government and take from the people the 
rights and powers reserved to them and the states; create a 
great central power without constitutional limit or restitution, 
but governed by the personal views of those in office. We 
have treated of this subject in the preceding pages, and refer 
to it here in considering the remedies for the evils endured by 
the people. We know that congress has granted charters to 
corporations organized for pecuniary profit, and that United 
States courts have taken jurisdiction of cases arising under 
state statutes, and disregarded the action of state legislatu 



808 MONOFOLIBB AND THB FBOFUB. 

and state courts on questions affecting the interests of raUnMid 
corporations, and have also decided that congress possesses the 
power to charter railroad companies. But we do not reoognise 
the decisions as right, nor do we believe thej will remain long 
unreversed. The opinion generally prevails that railroad cor- 
porations have abused, and are abusing, their charters; that 
they are oppressing the people; that there must be a reform 
of the abuses practiced by them. But differences of opinion 
exist as to the means to be applied. If we recognize the people 
as the source of power, and that they retain all the power they 
have not delegated to the ^vernment, the more nearly the 
interests of the people and the companies approach each other, 
the more closely they can be blended and united, and the more 
readily can abuses be corrected. To divide their rights and 
interests; to provide different governments, and rules of decis- 
ions for them ; to make the people amenable to state authority, 
while the United States authority takes control of corporationa, 
will create rival interests, and render railroad companies inde- 
pendent of the people. If the congress of the United States, 
daimiug to have the constitutional right, should provide by 
statute for transferring the exclusive control of railroad cor- 
porations to the United States, an entire change of the relation 
between the states and the general government would be the 
result. The states would not have the power to redress any 
abuses of the charter privileges granted to these companies, 
either by legislative enactment or by judicial decisions. Rail- 
road companies created by state legislatures, and hitherto 
subject to the jurisdiction of state courts, would be released 
from all obligations to state government, and from the control 
of state legislatures and courts. The congress of the United 
States and the federal courts would have exclusive control and 
jurisdiction over them, and constant confusion and conflicts 
of jurisdiction would naturally follow. Such a course would 
confer upon railroad companies still greater power, and place 
in tlieir hands more efficient means for oppressing the people. 
Another evil resulting from such a course would be, that the 
whole corporate interest of the country could combine and 
concentrate their whole influence for the purpose of accom- 



OONCLUSION. 809 

pHshing any desired object Now both congress and state 
legislatures must be bought over to their support; but if the 
United States government should take the whole control of 
corporations and railroad companies, the whole railroad force 
of the country, from the men who own, manage, and control 
this great interest, to the most menial employes, could be 
directed to a single purpose — that of securing congressional 
fevor. 

Now, state legislatures must be approached, and persuaded. 
as well as congress; then a single jegislative body, and that one 
the farthest removed from the people, would be the only body 
to claim the attention of this great corporate interest. When 
grants were once made to railroad companies, and privileges 
conferred upon them, it would be simply impossible to effect 
any change, no matter liow oppressive they might be upon the 
people. The idea that railroads are public highways, and that 
raih*oad companies are public corporations, already obtains 
among congressmen and in the supreme court of the United 
States. This is well understood among railroad men, as well 
as the fact that there is an increasing demand on the part of 
the people for the reform of the many abuses that are now 
practiced by them. Hence their anxiety to have the United 
States government assume control of railroad corporations. 
They desire it for another reason: Most of the special favors 
and grants they have received have been the result of bargain 
and sale. The same means will be used in the future unless a 
thorough reform is effected, and it will cost the corporate inter- 
ests of the country less to deal with one body representing all 
the states than it would to deal with tlie legislatures of all the 
states. Another reason for this desire on the part of railroad 
companies is, that the supreme court, as now formed, is in full 
sympathy with them upon the points at issue between corpora- 
tions and the people. 

One of the reasons urged by railroad companies and their 
supporters in favor of the general government taking control 
of all the railroads in the country is, that unless government 
does so, our local discriminating statutes will preclude the pos- 
sibility of inter-state commerce over these roads; tji»* mich 



810 MONOFOUEB AND THE FBOFLS. 

Btatutes would, in effect, place embargos on the commeroe of 
the west with the east; and that if congress fails to assnme 
snch control, tlie day is near when not a bushel of grain will 
be shipped over the railroads fi\>m the west to the sea-board. 
These apprehensions are urged with appai-ent seriousness, and 
so persistently that many citizens really believe that danger is 
to be feared from the action of state legislatures in the prem- 
ises, and that congressional control alone would provide a cer- 
tain and lasting relief This kind of reasoning rests upon the 
presumption that the people are too ignorant to understand 
their best interests; or that for the purpose of injuring others, 
they will destroy the value of their own property. 

The great want of the people is lower rates of transporta- 
tion, and greater facilities for reaching markets. The state 
legislatures are supposed to represent the people; in all their 
enactments, the protection and not the destruction of the best 
interests of their constituents will presumably govern their 
action. It is also fair to presume that they will be controlled 
by the constitution of the nation, as well as of their own state. 
Should statutes be enacted in any state, discriminating between 
its own citizens and those of other states, such statutes would 
contravene the provisions of the constitution, and would be 
without effect. The more free and unrestricted the intercourse 
between different states the greater the tenefits to the people. 
The farm products of the eastern and middle states are not im- 
portant in quantity, and their people cannot afford to see an 
embargo placed upon their commerce with the west. The 
prosperity of the south and west depends largely upon com- 
merce with the eastern and middle states. No state in the 
union could be prosperous if it should adopt the selfish 
and unconstitutional policy of non-intercourse with other 
states. The only conclusion deducible from these facts, is that 
the people of no state or section will be guilty of legislation 
so suicidal as to deprive its citizens of a free commerce with 
other portions of the country. Their own interest and pros- 
perity forbid such a course. The plea of the necessity of in- 
terference on the part of the general government for the pur- 
pose of preventing such a state of things, is used by the friends 



OONOLUSION. 811 

of railroad corporations to prepare the public mind to accept 
aa a necessity what is in fact bat a scheme, planned and con- 
cocted by these corporations themselves for withdrawing all 
control of railroads and railroad coporations from the state 
governments, and placing them under the jurisdiction of one 
great body or government, which at the present time is more in- 
tent apon extending its jurisdiction and strength, than intep- 
ested in the observance of constitutional restrictions, or the 
preservation of the rights and liberties of the people. 

The plea of the necessity of government interference is bad 
for another reason. It is well to judge of the future by the 
past. When a line of conduct has been followed for years, and 
has become settled, and understood by all; when it has proved 
itself successful in accomplishing its ends, it is not apt to be 
changed unless some latent defect should be discovered, or some 
new cause should arise demanding new provisions. Eeal, not 
imaginary, necessity must be shown to justify a change. If, 
as a matter of fact, state legislatures and courts were framing 
and administering our laws, to prevent or retard inter-state 
commerce, there might be some ground for a transfer of juris- 
diction from the states to the national government. But it 
should require more than mere assertion to justify such a 
change. A measure so radical, proposing such great changes — 
stripping the states of the power to control corporations char- 
tered by, and existing only in the states from which they re- 
ceived their charters, and permitting a great central power to 
take control of them, should not be adopted when it rests upon 
the declarations of interested parties for its only support — 
while the facts negative the declarations. 

Kailroads have been built and operated in the United States 
for more than a generation. During the last decade they have 
multiplied all over the west. They can be found in every 
state in the union. All, or nearly all of these roads have been 
constructed by companies chartered by state legislatures; these 
companies and their roads have been almost exclusively under 
the control of state legislatures and courts, each state acting 
independently. No instance can be shown where any state 
legislature has passed a statute attempting to restrict com- 



818 MONOFOUEB AM) THE FBOFLB. 

merce between different states, or to discriminate between 
citizens of different states, nor of unfriendly or ^restrictive 
legislation by any state on the subject of commerce oyer rail- 
roads passing from one state into another. No complaints 
have been made on account of any alleged discrimination. 
Then what is the necessity for the interference of congress and 
the general government. If the desire and design are to place 
railroad corporations beyond the reach and control of the peo- 
ple and the states; to render it impossible for the people or the 
states to correct abuses practiced by these corporations; to give 
the combined railroad corporate interest a position that will 
enable it to command the whole country — ^then there is neces- 
sity tor speedy action on the part of the general govemmoit 
But if, as is claimed, the object is to protect the people from 
oppl*essions and unjust discriminations, and to regulate and 
control these corporations, then there is no good reason for tike 
general government attempting the bold, dangerous and un- 
constitutional experiment of withdrawing from the states the 
power vested in them of regulating corporations of their own 
creation. The plea made in behalf of congressional interfer- 
ence in order to protect inter-state commerce is without any 
real foundation. It is manufactured and urged by those who 
are opposed to state sovereignty; who are in favor of a strong 
and supreme central government, and who are willing to sacri- 
fice the best interests and liberties of the people, that the great 
corporate interests of the country, already controlling the finan- 
ces and commerce of the whole nation, may be released from 
all responsibility and accountability to the people and the states 
from which they received their charters. The advocates of 
this measure seem to forget that there is no power conferred 
upon the general government by any part of the constitution, 
to take from the states the management of their own internal 
afiairs: — that railroad companies, being chartered by the states 
in which their roads are located, are and must remain subject 
to the exclusive control of the power creating them until there 
is a change in the fundamental law. 

Careful consideration and examination of this question will 
satisfy the people that their only hope for the restoration and 



CX>NCILT78IO]!r. 318 

preservation of their rights in the conflict now existing between 
themselves and the railroad companies is in states retaining 
exclusive jurisdiction and control of all the railroad corpora- 
tions and railroads within their respective borders. Another 
remedy suggested is, for the general government to purchase 
and own all the railroads in the country, and control them in 
the future. If this plan were feasible it is of doubtful wisdom. 
The purchase could not be made without the consent of the 
owners of the roads. This consent could only be obtained 
upon payment of the prices demanded, because railroad stock 
is not such property as can be condemned for public use. It 
is not to be expected that the companies owning the stocks 
and roads would sell for less than cost; and this cost would 
be the amount of money represented by the roads. This we 
have shown is over $6,000,000,000. To pay less than this 
amount, (being nearly three times their actual cost,) would 
be aiding the companies to defraud their creditors, for the 
reason that the roads are the only security the bondholders 
have. The purchase of the roads would increase the national 
debt to the amount paid for them, and impose additional 
burdens in the shape of taxes upon the people. It would add * 
to the list of government officers and employ6s at least two 
hundred thousand men, whose influence could be relied upon 
when the interests of the people and those persons in offioe 
conflicted. 

It may be said that the government would not operate the 
roads, but would lease them. Would this afford relief? It 
would require two parties to make the contract. The con- 
tractor would agree to pay a certain stipulated amount for the 
use of the road. He would then fix his own rate of charges 
for transportation, and being only a lessee, would be virtufiJly 
irresponsible. Government could not fix the price to be paid 
for the use of the road, and also the tariff of charges. But the 
lessee would demand the right to fix his own tariff in order 
that he might have sufficient to make repairs, pay for the use 
of the road, and make his profit. This system would be subject 
to the abuses of which the shippers now complain. Irrespon- 
sible persons would often have control of these roads, or a part 



314 MONOPOLIES AND IHE PEOPLE. 

of them, and a wide field would be open for frand and iiregular 
practices. The wants of the people demand some other and 
cheaper mode of transportation; either a chb.'^per system of 
building and open, ting railroads, so that the tariffs can be 
reduced, or some nt v method. The present roads may be 
superseded and anothei kind adopted. In that case, the pres- 
ent Railroad system wouii become of little value, and would 
prove a loss to the government. Last of all, the general gov- 
ernment cannot go into the railroad business without oontra- 
vening the provision of the constitution. In addition to the 
above reasons why the government should not become the 
owner of the railroads, is this one, which outweighs all others: 
It would place them entirely beyond the control of the people. 
If the control of corporations is left to the states, they are in 
the hands of the peopit., each county, town, and neighborhood 
can bring its influence to bear upon the questions at issue. In 
the election of congressmen and other United States officers, 
local issues are lost sight of National questions engage the 
public mind, while in the election of members of the state 
legislatures and other state officers, local questions enter 
largely in the canvass. Numerically, the monopolists are but 
a small fraction of the people; their great strength lies in the 
control they have obtained over the business and finances of 
the country. The people, united against the monopolists, can 
elect whom they choose to any state office, and can secure a 
majority in their favor. The remedy is in their own hands, 
and by united action they cannot fail of success. If a reform 
is ever effected, if the people ever regain their lost rights, they 
must commence at the ballot box. The producers throughout 
the west and south are largely in the majority; they can elect 
their own men. If tliey fail to do so, if they do not them- 
selves apply the remedy, they ought not to complain of others 
because they do not apply it for them. There need be no 
difficulty or delay in effecting reforms dependent upon legisla- 
tive action, provided the people are true to their own interests. 
Tliey elect their agents to act for them. If they do not elect 
men who are with them in principle, sympathy, and feeling, 
they ought not to complain. 



00NCLU8I0N. 315 

But, sajB the reader, admitting that legislative reform can 
be accomplished, how can fhe decisions of the courts be 
changed? This question presents more diflBculty. It has been 
the custom from time immemorial for courts to be governed 
and controlled by precedents. This is adopted in order that 
the law may be settled and certain. When questions arise 
under statutes, the meaning of which is ambiguous, resort is 
had to former decisions under like statutes, for a rule of con- 
struction, and thus the law is settled. We accept the decision 
as the law of the land, and to criticise it is seemed discourteous 
to the court making it. To call in question the motives of the 
courts, or to doubt their wisdom, is deemed rank " treason.'' 
The rule governing them may be of ancieat date; the reason 
for its adoption may have long since ceased; the rule itself 
may be obsolete. Yet, to find a precedent for a decision that 
outrages justice and is at war with the best interests of thie 
people, but in favor of the corporate interests of the country, 
this old rule is dragged from its long repose and made the 
basis of new decisions. Most of these old precedents origi- 
nated in monarchical coimtries, where all doubtful questions 
were construed in favor of the crown, and where the rights 
of the people always yielded to kingly prerogative. While 
precedents should have their true weight in determining 
between private parties, when none of the great questions 
arise affecting the national welfare, and while interpretations 
of the constitution, acquiesced in for many years, should 
remain as the settled law of the land, and be observed by the 
courts, the practice of solving constitutional problems by 
resort to old monarchical precedents, and the adoption of the 
reasoning of the high courts of the king's exchequer, should 
not be tolerated in a republic. Our form of government is 
new. Our courts should be the courts of the people, and not 
a star chamber for the protection and perpetration of the 
monarchical dogma, that ^^it is absolutely essential to inde- 
pendent national existence that government should have a firm 
hold of the two great sovereign instrumentalities of the sword 
and thepurse^'* as was declared by the supreme court of the 
United States, in December, 1871. Such declarations are at 



816 MONOFOtHS AND THE FBOFLS. 

war with our ideas of republican government It has no sup- 
port save in despotic governments and decisions emanating 
from them; jet it is the doctrine that must obtain, if the reoent 
decisions of the supreme court are to remain as the settled law 
of the nation. To accept this doctrine as a final exposition of 
the relative rights of the people and the government, is to 
acknowledge that the agents and servants of the people elected 
and appointed to ofiice, become their masters, clothed with 
imperial powers. 

It is not only in the adoption of old precedents that the 
rights of the people have been denied in courts, but by wrest- 
ing the meaning of the earlier decisions made by the distin- 
guished men who graced the bench of the supreme court in 
its earlier and purer days. The "Dartmouth College" case 
was the first in which the rights of states or the people to 
interfere with charter privileges was determined. We have 
given the history of this case in the preceding pages. It in 
no sense justifies or supports the recent decisions of the court, 
as to the rights and privileges of corporations organized for 
pecuniary profit. Yet, taking the decision in that case as a 
precedent, the supreme court has gradually encroached upon 
the rights of the people, until, under its latest decisions, rail- 
road corporations are public corporations, their roads are 
public highways, and the property of all the tax-payers can be 
taxed, and the taxes thus collected can be used by these private 
corporations to pay for building and repairing their roads. 
This is the latest new departure, and with the ''Legal Tender" 
decision, makes the interest of the whole people, as well as 
the value of their property, depend upon the action of corpo- 
rations. 

• No good reason can be shown why the decisions of courts 
should not be subjected to criticism the same as the acts of 
legislative bodies. The courts are a coordinate branch of the 
government, but with a power greater than that of the legisla- 
tive and execntive branches combined. Tlie decisions of C(»urtri 
render nugatory the acts of the other departments of the gov- 
ernment. To admit that the decibion.s of the jndiciary cannot 
be questioned, is to concede to it all the prerogatives possessed 



OOKOLUHION. 



sif 



by abBolute tyrants. Not only have the people the right 
to qnestion the decisions of tlie courts, and if need be to 
examine the motives which prompted them, but also to know 
the views of the men who aspire to judicial positions upon all 
questions of a general and public nature. No candidate for 
judicial position should be expected to form an opinion upon, 
or decide a question affecting the rights of parties until it had 
been finally submitted. But, upon the great questioils that 
fipequently arise affecting the public welfare, his views should 
be publicly known. Let the people understand the views of 
the men seeking for a seat on the bench before his election, 
and judicial legislation and partisan decisions will soon disap- 
pear. The judges of the supreme court of the United States 
hold their offices for life, by appointment, that court is further 
removed from the people than state courts. Reforms are not 
easily effected. Judges recently appointed received their 
appointment because of their understood views upon certain 
public questions. The course of decisions of this court dem- 
onstrates that the rights of the people are considered of less 
importance than the demands of corporations, in cases of 
conflict. While the present system of selecting these judges 
continues, with their life terms, it will be hard for the people 
to regain their rights. There are times when, because of 
oppressions, the people have the right to demand changes in 
the fundamental law. At the present time they are demand- 
ing redress; they are asking to be relieved from the unjust 
burdens imposed upon them by companies and corporations, 
who are petted and supported by the supreme court. But one 
certain means is left them, and that is an amendment to the 
constitution restricting their term to a certain number of years 
and providing for their election by the people. We could then 
free ourselves from the burdens imposed upon us by this anti- 
republican department of our national government, and take 
from corporations some of their oppressive powers and privi- 
leges now assured to them by the decisions of the supreme 
court. If any relief is afforded the people from the oppres- 
sions under which they now suffer they must obtain it through 
their own efforts. No other channel is now open. All of the 



818 MONOPOLIES AND THE PEOPLE. 

departments of the government, state and national, are more 
or less controlled bj the monopolies against which the fiEmners 
are now preparing to fight The silent ballot is the weapon 
to use; when used by a united people victory is assured. It 
is more potent than all the appliances of an army; more 
thorough in its execution than the bullet. It is the dread of the 
unfaithful legislator, dishonest o£Sce-holder, and the unjust 
judge. It strikes terror into the hearts of the unscrupulous 
men, who are willing to sacrifice honor, country, and future 
happiness for the purpose of amassing wealth, by extortions 
practiced upon the sweating, toiling millions who till the 
ground. While partial relief may be obtained through other 
channels, real, genuine and lasting redress can only be obtained 
by organized action at the polls. 

How can the abuses of the transportation system be cor- 
rected? This question is v now having a practical test in Illi- 
nois, and is being discussed throughout the country. It is 
being demonstrated that 2^ pro rata tariff will not afford relief; 
and that some other means must be adopted. What that may 
be, time will develop. No uniform pro rata tariff would be 
just to either the companies or the people. The shipping of 
way freights is always attended with more proportionate 
expense and delay than at prominent and terminal points. 
The extensive shipper, who loads a large number of cars for a 
single train, should be allowed more favorable rates than the 
one who ghips at some way station but one car of freight at 
long intervals. The real cause of complaint is the uniformly 
exorbitant rates charged for carrying freights in connection 
with the present warehouse and elevator system. The legis- 
latures and the courts are clothed with full power to prevent 
oppressive or unjust charges for carrying freight. They care 
not how much per cent, the companies shall make upon their 
investments; but when their charges amount to an abuse of 
their charter privileges the legislatures and the courts can 
correct them. The rule established by railroad companies to 
force from shippers such rates as will pay interest or dividends 
upon an amount of imaginary stock is unjust. The process 
by which they increase their stock to two or three times the 



0:>N0LX7S[ON. 319. 

amount invested is fraudnlent. The legislatnres and tlie 
courts possess the power to compel railroad companies to make 
a return of the actual amounts of money invested in their 
respective roads, in order to determine whether their charges 
are excessive and oppressive. Kailroad companies being 
dependent upon state legislatures for such grants as will enable 
them to construct their roads, and being common carriers, the 
legislature can, by statute, restrict the capital stock to the 
amount invested. If this course had been adopted years ago 
many of the abuses now endured by the people would have 
been prevented. Not only has the law-making power the right 
to restrict the stock to the actual cost of the road, but it has 
also the power to fix the maximum rates for transportation. 
Competition will always have a controlling influence upon the 
price of any commodity, as well as fixing the price of any 
species of services or labor. The legislature has the power to 
enact statutes to prohibit the consolidation of the busines of 
railroad companies, or a combination on their part to charge 
excessive tariffs; and the courts possess the power to enforce 
the observance of such statutes by the infliction of suitable 
penalties. In this connection the abuses practiced by the 
dispatch companies may be considered. The railroad compa- 
nies receive their charters with the understanding and implied 
agreement on their part, that, as common carriers, they will 
deal honestly with the public, and that they will furnish the 
necessary locomotives, cars, etc., for the purpose of supplying 
the ordinary want* of the people. This they are bound to 
furnish, and also to do the ordinary carrying of freights for a 
reasonable compensation. 

We have already given a history of the dispatch lines, and 
told who composed the companies, and how they do the busi- 
ness the railroad companies agreed to transact when they 
obtained their charters. These dispatch lines are a fraud upon 
the public, for which the companies should be held responsible. 
Every dollar paid to them, in excess of the regular rates of the 
railroad companies' regular tariff, can be recovered from the 
companies. The fiction of hiring their roads and locomoctives 
to another company, and giving such company a monopoly of 



890 MONOFOLIS8 AND THE FBOFLB. / 

the trade over tlieir road, in order that higher rates may be 
charged, is an abuse that the l^islatnre can correct and the 
courts can punish. Of the same nature are the "warehouse" 
and "elevator" combinations. Of these we know what is 
open and visible; but of the internal workings and divisidnB 
of the "pools," or, more properly speaking, the "spoils," we 
know but little. We know that it is a means of oppression, 
and that it compels farmers to sell to inside men, or sacrifice 
the moiety of the crop the railroad companies aUow them to 
retain. In law, railroad companies are bound to ship for all 
who pay the regular rates without bestowing a bounty upon 
elevator and warehouse men; and they are also bound to 
deliver the freight at such warehouses as the shippers direct. 
For a reftisal to do so, they are liable to the shipper for dam- 
ages to the amount of the loss suffered, and sums extorted. 
Shippers can compel the companies to receive their fi!^ght8 
on board their cars at regular stations, and to deliva- their 
freights at the place designated, irrespective of any and all 
combinations to prevent it. To conclude this whole matter, 
the people have the power to reform all the abuses they suffer 
at the hands of these monopolies by the election of men to 
legislative oflBces whose hands will not touch bribes, and by 
filling the seats of justice with judges who are not so wedded 
to ancient precedents as to do injustice , rather than make a 
new departure; by men whose chief object shall be to do equal 
and exact justice to all, and not resort to judicial legislation 
and new interpretations of the constitution in order to uphold 
and strengthen the power and advance the interests of corpo- 
rations already too powerful in the land. 

In order to restore to the people the rights now denied them, 
and to abridge the combined power of the monopolies who now 
rule the country, the control of the finances must be taken 
from them. The financial policy of the government, adopted 
during the late civil war as a war measure, is still adhered to. 
The internal commerce of the whole country is controlled by a 
few men — the same who own and operate the railroads and rule 
the business in " Wall street." The peculiar financial policy of 
the government tends to concentrate the money of the country 



oaNOLuaoii. 8S1 

— to gather it together, rather than to scatter it abroad. New 
York City being the great commercial center, and the internal 
commerce of the country being under the control of a few 
men who make this metropolis their principal place of busi- 
neis, with their vast lines of railroads extending over the 
whole country, bringing to them a never-ceasing stream of 
money, they are able to regulate the market value of almost 
all articles of commerce, and to limit the supply of the circu- 
lating medium as occasion serves. We have already shown the 
bad results of the system upon the interests of the people, and 
do not intend to repeat it here. Ordinarily, the laws of trade, 
of demand and supply, will regulate and equalize the distribu- 
tion of the circulating medium over the country. Such will 
always be the case if no special causes exist to prevent it. But 
with the railroad interest of the country controlled by the same 
combination of men who " comer " all the coin in the country; 
with the established policy of the government making depre- 
dated paper the only circulating medium, and the " legal ten- 
der " decision making this depreciated currency the standard 
of values; with the constant fluctuation of prices resulting 
from the above named causes — it is not strange that these cor- 
porations and Wall street brokers control the finances of the 
country. Until this control is taken from them, the wrongs of 
the people cannot be redressed. 

Money is said to be "power," and when a certain interest or 
locality has the absolute control of this "power" all others 
must suffer. One means of stripping railroad magnates and 
Wall street gamblers of this power would be the resumption 
of "specie payment." As we have shown, under the present 
financial and tariff policy of this country, this is out of the 
question. With our legal tender decisions^ our depreciated 
currency, and our tariff system, the balance of trade is largely 
against us; our coin is being shipped to other countries, not 
leaving us suflieient for the purposes of resumption, or for cir- 
culation. Add to this the fact that the Wall street brokers 
own or control most of what is in the country, and the truth 
is patent that resumption cannot be effected until the whole 
financial policy of the government is remodeled. Will an 
21 



832 MONOFOLIEB AM) THE FEOFLE. 

increase of the banking facilities of the conntiy under the 
present system accomplish this object? We answer, No. An 
increase of banks and of the currency, woald only afford tem- 
porary relief. Suppose $100,000,000 should be added to the 
present amount of currency, and that it should all be distrib- 
uted in the west and south. Wall street operators would only 
have to increase their operations to gather the whole of it nnd^* 
their control. They now, in their various ramifications, own 
and control capital more than sufficient to pay the whole of 
the national debt and leave them a large surplus. While the 
distribution of additional currency through the country might 
afford them temporary relief, under the combined management 
of railroad corporations and Wall street brokers, and without 
any change in their present system, they could and would soon 
absorb this surplus of currency, and resume the absolute con- 
trol of the finances of the country. The people would again 
be in ^ their power, with an additional burden imposed upon 
them, " to- wit:" — the payment of the interest on an additional 
, $100,000,000 of government bonds. Would a change in the 
banking system of the country take from these monopolists 
the control of the finances of the country? This would 
depend upon the character of the change. If the secretary of 
the treasury or his department, should retain the entire man- 
agement of the system, no real relief could be expected. 
While the general government has the exclusive right to regu- 
late the coinage and value of coin (money), it is the assump- 
tion of power not delegated to vest in one man or department 
the exclusive management of the finances of the entire country 
— not only of the government, but of all private persons. We 
do not comprehend the wisdom of fixing and limiting the 
amount of currenxjy the country may have for a circulating 
medium, and empowering one man to decide how, when, and 
where it shall be distributed. Conceding to the general gov- 
emment the power to charter banks, and issue treasury notes, 
the power is not exclusive. Tliere is no limit to the volume 
of gold and silver, and if government should attempt to limit 
the amount of coin, it could not do it. The laws of trade, the 
demand and supply, would fix the amount. Under our present 



CONCLUSION. 328 

banking system, coin is driven from circnlation, and a defi- 
nitely fixed amount of treasnry notes and government paper is 
all that the country is permitted to have for the transaction of 
its whole business — and this amount must be placed just where 
the comptroller of the currency shall determine. 

The legal tender decisions have made the resumption of 
specie payment impossible. The present banking system pre- 
vents an increase of currency or treasury notes, and gives con- 
centrated capital absolute and unlimited control of the business 
of the country. Any other banking system, if left under the 
same control, would be subject to the same objections. No 
one department of the government, nor the whole government 
combined, can determine the amount of currency necessary for 
transacting the business of the country. Fixing the amount 
in the present banking act has afforded the means to Wall 
street operators for " cornering " such amounts of currency as 
would derange the market and depress prices. No valid objec- 
tion can be offered to what is known as the " free banking 
system." Such a system, if generally adopted, would strip 
railroad corporations, Wall street jobbers, and all other rings 
and combinations of men, of the power to control the finances 
of the country. Another advantage would r^ult to the people: 
It would free them from the annual payment of from $18,000,- 
000 to $20,000,000 interest on government bonds purchased by 
bankers, and deposited with the treasury department. Such a 
system of banking would reduce the margin between coin and 
currency, and promote the resumption of specie payment, and, 
instead of having only depreciated paper as a circulating me- 
dium, we would have a currency convertible into coin. The 
giant corporations and other monopolies that now rule would 
be shorn of much of their strength, and the people would be 
freed from their relentless grasp. 

Seventh. — Free Trade and Direct Taxation. — Our conclu- 
sion would not be complete were we to omit a reference to the 
subject of tariff". Indeed, it so interlaces the question of trans- 
portation and the construction of railroads as to become an 
integral part of our discussion. Disclaiming any partisan 



8S4 MONOPOLIBB Aim THE FBOPLB. 

▼iewB of the qnestion, we shall try to demonstrate that sD 
tariffs are unjust and oppressive. In a former chapter we htVe 
shown the operations of onr tariff, and some of its results. 
We now proceed to demonstrate that the true rule in all our 
dealings and commercial transactions is, to sell where we can 
obtain the best prices, and to purchase where we can obtain 
the desired article for the least money. Demand and supply 
should regulate the prices in our dealings, and protective tarifb 
should be repealed. A ^^ protection " that taxes three-fourths 
or four-fifths of the whole people, in order that the remaining 
fraction may amass riches, is an oppression that ought not to 
be tolerated. No class is more oppressed by protective tarifib 
than the farmers and producers of the country. They do not 
ask, nor do they receive any protection. 

With high or protective tariffs, farmers and producers pay 
much more than their just proportion to the support of the 
government. The consumer simply pays tariff duties on what 
he consumes, while the producer not only pays on what be 
consumes, but his product must pay a large part of the duty 
upon what is 'consumed by others. The products of the coun- 
try are its wealth. No matter who is obliged to pay the duty 
in the first instance, ultimately the producer must pay it. To 
illustrate this proposition, let us take any given article pro- 
duced, manufactured, or constructed in the United States. 
There is a duty on some of the material used in the manufac- 
ture of the reaper. The manufacturer pays this duty, and 
adds it to the cost of the machine purchased by the farmer. 
In the erection of factories, machine shops, furnaces and 
foundries dutiable articles are used; all of which, in the end, 
must be paid for from the products of the country. In the 
construction of railroads, locomotives, cars, etc., iron and other 
articles are used upon which there are high tariff rates. 
These duties are paid by the companies in the first instance; 
the amounts paid are included in the cost of the roads, and 
must be returned in shape of increased rates for transportation 
over the roads. In the end these duties are paid by the 
producer. Every bushel of wheat, corn, or other grain shipped 
over a railroad pays part. Protective tariffs are so interwoven 



OQNOLuaoaff. 896 

with the constmction of railroads and the internal commeroe 
of the country that they cannot be separated from the qnes- 
tions we have been discussing. All tariff duties are c^reot 
charges upon the productions of this country, and not on any 
other. Import duties are not paid by the people of the coun- 
try from whence the goods are imported, but by our own 
people. It matters not who pays the tax in the first instance; 
in the end it must be paid from the product of the countiy. 
The main product of our country, especially of the west and 
south, being from the soil, it follows that the farmer must 
pay by fer the greatest portion of tariff duties. The burdens 
imposed on him are more than his just share. In the first 
place, he pays directly the duty charged upon what he con- 
sumes, and then pays indirectly much the larger part of the 
duties paid in the first instance by others. He is charged with 
the cost of shipping his grain to market, whether that market 
is in the United States or Europe, and his product must pay 
the cost of shipping the return cargo from Europe to America, 
with the addition of such protective duty as congress may fix 
by statute. His product must bear the whole burden. " In 
other words, the question of transportation is part and parcel 
of the tariff question, and cannot be dealt with apart from it. 
Transportation is made dear by the dearness of supplies; that 
is to say, the railroads are taxed enormously, and, through the 
railroads, the farmers, for the benefit of special industries. 
There can be no cheap transportation without cheap iron, 
cheap cars, cheap stations; and, what is more, there can be no 
market for American produce abroad so long as the sale of all 
foreign commodities, except gold, is made as difficult as high 
duties and vexatious custom-house regulations can make it. 
Agricultural produce at the west is now a glut ; it must 
become more and more of a glut if either more railroads are 
opened or the cost of transportation on the present roads is 
diminished, as long as new markets are not provided, or, in 
other words, as long as access to the crowdi r ions of the 
Old World is artificially impeded. Of cou; 5, there may 
come a time when there will be population \ in the 

west to eat up all its com and pork; but, < mte 



826 MONOPOLIBS AND THE FBOPLE. 

of agricultafal and railroad development, this will not be 
witnessed by either the present generation or the next, and 
the cry of the ' Granges ' ought to be for a clearing of the 
outlets to the Old World in all ways. To secure this it is not 
enough to cheapen transportation; we have to oflTer a market 
to the foreigner for his commodities, in order to get him to 
tike ours." 

iis we have before remarked, the settled plan for raising 
revenue for the support of the general government is by import 
duties. By common consent this plan has been accepted as 
the most feasible. While we have been following this method 
from the organization of our government, by legislation wfe 
have been making war upon foreign commerce, by imposing 
tariffs for the protection and government of domestic manu- 
factures. By congressional enactment we determine that w^ 
will support the government by the collection of duties levied 
upon foreign imports; and then we levy high rates of duties 
for the purpose of prohibiting these foreign imports, and for 
building up and protecting home manufactures. Under the 
present tarift', but for the fact that our own manufacturers take 
advantage of the high rate of duties, and advance the price of , 
their own products to the extent of the duty, foreign impor- 
tations would cease, and some other means would have to be 
adopted to supply the revenue needed by the government. 

The only benefit thus far resulting from our present high 
tariff is the enriching of a few men by the imposition of unjust 
and unequal burdens upon the farming and producing classes. 
It might be pertinent to inquire whether there is any justice 
in any kind of tariff. All are bound to contribute their pro 
rata share for the support of the government. In theory the 
property of the country is taxed for this purpose. Such a 
system of taxation is just and equitable, because it is uniform; 
the property of each individual pays its p7'0 rata share, and 
the burden is equally divided. As we have already shown, 
revenue derived from tariffs is a tax upon the labor of the citi- 
zen, and not on the wealth or property of the country. The 
poor man — the man who depends entirely upon his daily labor 
for the support of himself and family — ^pays as much for the 



OQNGLUSIOH. 837 

support of the govemment aB the man of immense wealth. 
His daily toil, considered in the light of its value to the gov- 
ernment, is taken as equivalent to the $500,000 of the rich 
man. The industry, and not the wealth, of the country is 
made to support the govemment when the revenue is derived 
fix)m import duties. No one will deny the right of the gene- 
ral government to provide for its own support, nor its right 
to provide means to this e: ^ by the levy of import duties; 
yet the wisdom of these duties does not so clearly appear. 
The reader will have noticed that this method of raising reve- 
nue operates unequally; that it gives to Amb*''»An manufac- 
turers an absolute monopoly of business; that the only reason 
why imports do not cease is because the prices of American 
fabrics have been arbitrarily raised to the highest point 
allowable without permitting the importer to undersell the 
home-made article. The manufacturers, under the statute, 
having a complete monopoly, are not slow in availing them- 
selves of it, and, as a natural result, the whole country is com- 
pelled to contribute to their support. It may be asked: How 
would you provide for the support of the govemment ? We 
answer: By direct taxation ; because this is a just and equitable 
manner of raising revenue, compelling the wealth and prop- 
erty of the country, and not the labor of the toiling millions, 
to support the government. Because it will prove less expen- 
sive, and will do away with custom houses and custom-house 
officers — with the frauds, swindling and robbery that now 
afflict the country. Because it will open to us the markets of 
the world, and give us an outlet and market for our agricul- 
tural products. Now the balance of trade is against us ; our 
country is being drained of its coin and its wealUi; all produc- 
tive industries languish, because of our selfish policy of attempt- 
ing to become exclusive in our commerce. 

We are content to trammel all dealings with foreign nations 
in the way of barter, sale, and exchange, and send our coin to 
Europe, while we use, as the representative of money, an irre- 
deemable paper currency. Free trade would enable us to 
increase out commerce and shipping on the ocean; to arrest 
the stream of coin that is flowing from us to Europe; to sell 



828 HONOFOUEB AKD THE FB6FLB. 

where we could obtain the test prices, and buy where we oonld 
make the best bargains. We are in favor of direct tamtion for 
the support of the government, because it will simplify our 
revenue system, and consequently require less revenue than is 
now needed. It will compel more rigid economy in the admin- 
istration of the government, and place within the reach of the 
people the means of ascertaining how much is annually ex- 
pended by those in power. It will destroy one branch of the 
system of monopolies that is robbing the agricultural and pro- 
ducing classes of their substance. Let us not become alarmed 
at the thought of this direct taxation. We accept it as the beat 
method for raising revenue for the support of state and muni- 
cipal government ; and no good reason can be shown why the 
same method would not be best for the general government. 
The amount to be paid by the men of wealth would be in 
excess of what they now pay, because their property, and not 
what they consume, would be the basis of taxation. But to 
the laborer with a family, the mechanic, the farmer with small 
means, and to a majority of men who now pay in shape of 
duties from $100 to $200 annually, the amount required would 
be but a tithe of the sum now demanded. To learn something 
of the rate per cent, necessary to support the government, let 
us look at the valuation of the property in the United States, 
as returned with the census in 1870. The actual amount 
as returned was $14,178,486,732 — call it in round numbers 
$16,000,000,000; a tax of one percent, on this amount would 
produce a revenue of $150,000,000. The above valuation is taken 
mainly from the returns made by assessors, and is but little 
more than one-third of the real value. Let us double the 
amount, then the value of the property in the United States 
will be $30,000,000,000. By an examination of the returns it 
will be seen that little railroad property is included in the 
valuation. If this property is added, the above amount will 
be largely increased. By supposing the real value of the 
assessable property to be $30,000,000,000; then a tax of 
one-half per cent, would raise a revenue of $150,000,000, a 
sum sufficient to pay all the necessary current expenses of 
the government and leave something to apply on the national 



OONOLUSION. 329 

debt A tax of three-fourth per cent, would raise a revenue of 
$225,000,000, enough to support the government and pay the 
interest on the whole of the national debt. Should the special 
tax be continued on spirits and tobacco, then a tax of four mills 
would raise a suflBcient revenue for all legitimate governmen- 
tal purposes. Now, a laboring man must pay from the pro- 
ceeds of his labor from thirty per cent upwards for almost all 
his purchases of clothing for his family, and the same on many 
other articles of consumption. If, in the course of a year, he 
purchases to the amount of $150, of this sum $50 is paid, in- 
directly, it is true, but nevertheless it is paid, and is a tax. 
With direct taxation, if his homestead should be worth $1,000, 
instead of paying $50 as he now does, he would pay five for 
the support of the government, and the other forty-five dollars 
now paid by him from the proceeds of his labor would be 
charged against the property of his rich neighbor. There is 
no injustice in this method of raising revenue for the support 
of the government, and its adoption would relieve the people 
from the oppressions of a ring of wealthy monopolists who now 
control the entire manufacturing industries of the country, 
and would allow the laws of trade, of demand and supply, to 
fix the prices of manufactured articles. No reason now exists 
for the continuance of a law that assures to the manufacturer 
large dividends on his investments, while the farm products 
must be sold and bartered for a nominal price. The producer 
asks no protection save access to the market and the privilege 
of keeping for his family and himself the net proceeds of his 
crops, without being compelled to bestow one-third of it as a 
gratuity upon the already rich and lordly manufacturer. This 
right the agriculturists will never enjoy until the old anti- 
republican theory of protective and revenue tariflfe is exploded, 
and the equal rights of all are vindicated. When this tariff 
embargo on commerce is removed, when this blockade is 
raised, and the producer can send his grain to Europe, and in 
return receive such manufactured articles as he needs, without 
payint^ royalty to some American lord, in shape of tariff (iron- 
ically called " protection '*) the producing classes will ask no 
other aid of government. Then will appear the dawn of that 



880 MQNOFOLIS8 AND THS FBOFLB. 

imiversal brotherhood of man, which sooner or later will illu- 
minate the whole civilized world. With ^ free trade " and 
direct taxation, a death blow will be given to monopolifits, and 
the burden so long borne by the laboring .and producing 
classes wiU be lifted from them, and the; will^be permitted to 
enjoy the fruits of their own labor. 

Eighth. — Patent Rights — Cash Payments Recommended 
in, Place of Long Stcundvag Mortgages on the Oenins of 
Amerioan Indusi/ry, — We have shown some of the abuses 
connected with the patent system of the country, and their 
efiect upon the people. While the monopoly of inventions is 
not of as great magnitude as some others of which we have 
treated, the oppressions resulting from it are more annoying 
than many that engage general attention. Inventions are pat- 
ented because they are expected to be of public benefit, and 
because it is but just that the inventor Bhould be rewarded for 
a discovery or invention that will advantage the public gener- 
ally, or individuals who may make use of the invention or dis- 
covery. The monopoly given to the inventor, or discoverer, is 
to enable him to compensate himself for the time, labor, and 
skill, as well as the talent or genius bestowed upon the inven- 
tion, and also to encourage others to enter the list as inventors 
or discoverers of new and useful articles and principles. But 
our patent system was never designed for giving a monopoly 
to any one who happened to shape a plow handle different 
from those now in use, or who cut a thread used in operating 
a sewing machine in a peculiar manner, or for the many hun- 
dreds of trifling alterations made in many articles in general 
use, or in the manner of using them. An examination of the 
list of patents issued will demonstrate that not one in ten eon- 
tains any new principle, or is of any value to any one, save 
the patentee. The apparent ease with which patents are ob- 
tained, and the indiscriminate manner of their issue, is a great 
and growing evil that should be remedied. No patent should 
be issued until a test had demonstrated its perfection and use- 
fulness. An examination of many articles on which letters 
patent have been issued, coupled with the attempt to use them, 



OONGLUaOH. 381 

diBcloses the fact that the invention, if it ever could be of any 
particular value, required further improvement to make it of 
Buch value, and that letters patent had been issued for an un- 
developed theory. If the invention had been submitted to a 
practical test, this state of things would not have occurred, 
and the public would not have been defrauded. Patented arti- 
cles enter so largely in the prosecution of all industrial pur- 
suits that it is of the utmost importance that they should be 
perfect in their plans and construction, and that the govem- 
cmment should assume some kind of responsibility in all 
cases when letters patent are issued. Such letters say in sub- 
stance, that the patented article is new and useful, and that it 
is reasonably fit for the work in the view of the inventor. 
These letters patent are a letter of credit to the patentee; as a 
license permitting him to sell his invention, and forbidding 
all persons to sell or use the invention without his consent. 
Under the present law it is simply a special favor, in shape of 
an exclusive right, granted to an individual to defraud the per- 
sons with whom he deals. The law should be so modified as 
to make the government or the examining officer responsible 
in all cases when patents issued for pretended discoveries or 
inventions prove to be neither new or usefrd. K such were 
now the law, there would be less complaint of frauds prac- 
ticed by pretended inventors, and the utter failure of patented 
articles to answer the purposes for which they were intended. 
The law should be so amended as to prevent oppressions 
and extortions in the sale and use of articles of real merit, for 
which the inventor should be rewarded, and should have an 
exclusive right to use and sell his invention. There should be 
some limit to the price of the artida Government has given 
him an exclusive right; he should be restricted to such prices 
as would fairly compensate him for his discovery. His case is 
not like that of other men, who in their dealings come in com- 
petition, and where this competion and the laws of demand 
and supply fix the prices of the commodities in which they 
deal. He has the whole business in his own hands^ nnd any 
attempt on the part of others to in ' ) th his exclusive 
right is forbidden and punished. We y stated that 



332 , MONOPOLIBB AND THE PROFLE. 

machines sold in this oonntrj for $75 could be bongfat in '. 
Iftnd for less than half that snm. Most of the artides and 
machines of different kinds patented in this country, and naed 
in Europe, are sold by the patentees, their agents and aseigns, 
at less than half the sums demanded here at home. In 
Europe, where they have no monopoly, no exdusive right, tliey 
come in competition with others; hence they sell at fiur prieea. 
But in this country, where they have an exclusive right, they 
extort from the purchaser from one hundred to five hundred 
per cent, on the cost of the article. This, government ahonld 
prevent. But a better way to adjust the whole matter between 
the public and the inventor would be for the government to 
pay a premium according to merit, for all new and useful in- 
ventions, and remove all restrictions. Let all be free to malce, 
use, and sell, not the invention, but the thing invented. Tliit 
course would require careful and thorough examination and 
experiment before the principle was indorsed by the gdvem- 
ment, and the premium paid. Or, if his invention proved to 
be new and useful, let government pay to the inventor sndi 
sum as would fairly and liberally compensate him, and give 
the invention to the public Government has. bestowed im- 
menBe grants of land upon railroad companies, for the avowed 
purpose of asRisting in the development of* the country; with 
greater justice could it bestow upon the whole people all use- 
ful discoveries and inventions. Such a course, adopted and 
executed in good faith, would make it impossible for adven- 
turers, sharpers, and swindlers to impose worthless inventions 
and pretended discoveries upon the government, and then palm 
them off upon the people. Under the present system of 
obtaining letters patent, the people are wronged and often 
cheated, and for their wrongs the government is mainly respon- 
sible. Some other plan should be adopted, which in its opera- 
tions would liberally compensate the inventor, and at the same 
time-protect the people from extortions practiced by the owners 
of valuable inventions, and also from the thousands of adven- 
turers who hav^ been so fortunate as to obtain letters patent 
upon pretended discoveries of principles neither new nor 



ooNGLuaov. 88S 

usdbl, using their letters of eredit for the purpose of defraud- 
ing the public. 

OoNouTSioiv. — ^We now approach the end of our labors. We 
have sought to present to the reader a candid statement of 
Hie different questions we have discussed; to lay before him 
evidence of the great and growing power of the men who are 
surely and swiftly getting control of the departments of the 
government, and monopolizing the finances and commerce of 
the whole country. In doing this we have endeavored to direct 
attention to the exclusive and munificent grants made to rail- 
road companies, and to their abuse of these grants; to the 
means used by them to get control of the legislative and 
judicial departments of the government, and their apparent 
suidoese in that direction; to the abridgement of the rights of 
iii% people incident thereto; to the dishonest and fraudulent 
pn^ptices of the men constructing, owning, and operating rail- 
roads; to the disgraceful Credit Mobilier swindle, and its infla- 
eaoe upon the country; to the questionable position of soma 
of the men representing the people in congress; to the 
destruction of the rights of the states and of the people; to the 
disregard of the constitutional restrictions and safeguards when 
the interests of these corporations were to be subserved; the 
purposes for which taxes should be levied; to the nature of 
railroad corporations — that they are private in tneir organiza- 
tion, and subject to the control of the people; to the effect of 
the policy of affording local aid to railroad companies by taxa- 
tion, etc.; to the blighting influence attending municipal sub- 
scriptions to railroad companies; to the impositions practiced 
in transporting freights, and the warehouse and elevator 
abuses; to the fraudulent increase of capital stock by railroad 
companies through the watering process, and the extorticms 
necessary to this dishonest practice; to their relative immunity 
from the burdens imposed for the support of government; to 
the strong grasp of consolidated capital upon the legislation 
of the country; to the special privileges granted to corpora- 
tions by state legislatures; to the influence of these corpcnu- 
tions on the executive department of the government; to the 



334 HONOFOLIBS AND THB PEOPLE. 

absolute control of the treasniy and the finances enjoyed by 
corporations and Wall street brokers, with the manner of doing 
business in Wall street; to the influence of corporations in the 
selection of judges of the supreme court, with the decisicHis 
following the reconstruction of that court; to the banking and 
financial policy of the government, and its bad results; to the 
tariff policy and its effect upon the agricultural and producing 
classes; to the patent system and its abuses; and finally to the 
&ct demonstrated, that unless the many abuses that have 
obtained in the land can be corrected, the people will be justi- 
fied in calling into action their inherent rights for regaining 
those privileges refused to them, but conferred upon the cor- 
porations, rings, and combinations which have obtained such 
great power in the government. We do not claim that our work 
is free from errors. We have sought to state the facts correctly. 
If they are inaccurate, the errors are unintentional. It waa 
not with the wish or intention of doing injustice to any n^an, 
class of men, corporations, or ofScers of the government, that 
we undertook this work; but with. the firm belief and strong 
conviction that the liberties of the people were being taken 
from them, while a gigantic oligarchy was obtaining control 
of the government. We believe the remedy is yet with the 
people; but to save themselves prompt, speedy, and united 
action is imperative. We have watched with increasing inter- 
est the growing power of corporations, for years, hoping that 
the time would come when the people would awake to the 
necessity of asserting their latent powers for the restoration of 
their rights. The civil war and other great political questions 
have engaged the public attention, while selfish and ambitious 
men have combined and consolidated their wealth and corporate 
power for the purpose of controlling the government and com- 
merce of the country. Their success has been such as to alarm 
the agricultural, the producing, and laboring classes. The indi- 
cations now are that active and aggressive war will be waged 
against these oppressors of the people until they are shorn of their 
great power and the rights of the people are restored. Desiring 
to aid in this great reform, we have deemed the present a favora- 
ble time to present this work to the nublic. While the com- 



ooNOLnsioir. 885 

bination the people are now eombattmg is powerful — ^posBessing 
a dangerous influence over the legislative and judicial branches 
of the government, well organized and vigorous, controlling 
the finances of the country and holding our commerce in its 
grasp — strong in wealth, and in the extent of its organization 
— ^notwithstanding these fearful facts, that old republican truth 
still obtains, that " the people are the source of all power." 
That power is now being aroused. The watchword now heard, 
is ''Equal and exact justice to all." That potent, though 
silent weapon, the ballot, is a sure correction of all the abuses 
when intelligently used. The signs of the times are hopeful 
from the fact that, for the first time in many years, the people, 
especially the agricultural, producing, and laboring classes are 
taking the lead. They are reading, thinking and acting inde- 
pendently of old political and partisan leaders; they are exer- 
cising their rights as freemen, lliey have declared that '' old 
things shall be done away, and all things shall become new;" 
that the government shall be taken out of the old political 
grooves in which it has been running; that it shall assume 
new life, with the rights of the people fully recognized. Tliat 
when the rights of the people and of free government on the one 
hand, and the privileges claimed by the combined corporate 
interests of the country on the other, are at issue, these rights 
shall not be made to yield to old precedents originating in 
monarchial and despotic governments, in order that the privi- 
leges claimed by corporations may be upheld. 

The organization of the Patrons of Husbandry forms a 
nucleus around which all reformers can rally. The reforms 
they seek will effect the liberation of the whole people from 
the oppressions under which they now suffer. Our aim is to aid 
in this work. We feel assured that there is an irreconcilable 
conflict between the monopolies and the people; that the 
powers and privileges assured to corporations are at war with 
republican institutions, and hostile to the constitution of our 
country. To effect reforms will require time. Some relief 
can be speedily obtained, but to accomplish thorough reform, 
and bring the administration of the government under the 
control of the people, will require that the offices shall be filled 



886 HONOFOLIS8 AND THE PEOPLE. 

by men whose education and pnrsuits have been such as to 
place them in full sysmpathy with the people — men who will 
not spend their time as legislators and judges in discnflsing 
federal prerogatives, and classing our republican govemment 
with old time despotisms. The doctrine that corporations are 
subject to legislative control must be fully established as the 
fixed and settled policy of our govemment. When this point 
is reached, the farmer will not be obliged to divide his crops 
with railroad companies — and so with all other abuses. The 
power to correct all abuses must remain with the people. The 
prosperity of the people, the perpetuity of our form of govern- 
ment, the rights of the states and the public can only be 
preserved by guarding against all encroachments made npcm 
free institutions, whether they originate in congress or out of 
it — whether they are enunciated from the bench of the supreme 
court, or from the stump. In these days when the tendency 
is to a strong centralized government — when a few men control 
the finance of the country — when the whole commerce of the 
ooimtry is controlled by Wall street gamblers — when special 
grants and privileges are bestowed upon companies and indi 
viduals, and when the property of each individual is insecure 
and liable to be assessed for the building of railroads — at this 
time, there came from Justice Bradley of the supreme court 
of the United States, these ominous words: " It is absolutely 
essential to the independent national existence that govenimeiU 
should have a firm hold on the two great sovereign instruments 
of the sword and the pursed This announcement is made from 
the bench of the supreme court of the United States, on the 
fifteenth day of January, 1872. The govemment must have a 
firm hold on the purse and sword. This is the declaration of the 
court made but a few months before it decided that railroad 
corporations were public, and that the property of private third 
parties of the whole people could be taxed to build them. We 
claim that under our form of government the people are the 
power to retain the control of the purse and sword ; that to 
place them together in the hands of those persons who fill, for 
the time being, the govemment offices, is to take from the 
governing power its rights. But when the people's purse and 



00NGLT7SI0K. 887 

{he goyermnent finanoeB are subject to the action of corpora- 
tioxiB and rings, the special fiiyorites of the conrts, the people 
ai^ imperatively called upon to arise and assert their rights as 
freemen — ^to throw off this oppressive yoke — ^to stamp with the 
seal of condemnation, not only the enunciation of snch anti- 
republican sentiment, but the judge who uttered it. The real 
question at issue between the people and monopolies fostered 
and protected by government is, whether the people shall rule, 
or remain the servants and vassals of the monopolists. The final 
determination of this question will decide whether we are to 
live under the republic planned and formed for us by our revo- 
lutionary ancestors, or are to submit to the oligarchy shaped 
fo^ us by recent enactments and decisions in favor of a class 
of men, who, for the sake of private gain, are overturning and 
destroying our free institutions. The issue is fairly presented; 
tiie lines distinctly drawn. The corporate hosts are marshaling 
their forces; the people, under the lead of the tillers of the 
soil, are preparing for battle. 

When the Union was threatened with disruption, and the 
armies were about to engage in conflict, they armed themselves 
with the death-dealing sword and gun. Hundreds of thou- 
sands of brave and patriotic men proved their devotion to their 
ooimtry by the sacrifice of their lives for its preservation. No 
such sacrifices are now demanded. In a legal, constitutional 
manner, these corporations, rings, and combinations, can be 
routed, "horse, foot, and dragoons;" their friends "at court" 
can be displaced; their paid agents and attorneys can be driven 
from the halls of congress and the state legislatures; their 
judges can be invited to vacate their seats that others, elected 
by the votes of the people, may fill them; and the standard of 
"equal rights " can be again reared aloft without the use of 
bullets or the shedding of blood. 

But after all these errors and abuses shall have been cor- 
rected, other questions will arise. ' The farmer of the west and 
south must have cheap transportation to the seaboard. It 
may be demonstrated that our present system of building rail- 
roads %ill not answer the purpose because of the great expense 
of 'conttructittg aiiid operating them, and that other means 
22 



888 MOHQPOIJDD AHD THE FBOFLB. 

miut be adopted. Under the oonstitution, the geoMnl gowit. 
ment has ezdusive maritime jarisdiction, and can makB oanali 
and slack-water navigation. History demonstratea that wmter 
tnmsportation is always cheapest. The government ahoiild 
provide for water transportation from the great ^agrionltnnl 
centers to the seaboard. 

The general government possessing, nnder the oondtntioii, 
the exdnsive jurisdiction over all the navigable waters of tlie 
United States; having full authority to improve these national 
highways by deepening and widening their channels; remaving 
obstructions; building locks, dams, and lighthouses, and estab- 
lishing harbors; it has also the right — ^by making new efaanr 
'nels, canals, and outlets for rivers and lakes — ^to connect inland 
navigable waters with the seaboard, and thus make these great 
national channels available for commercial purposes. "Ety tliis 
means, the people would be freed fi^m the oppresaionB and 
extortions of railroad companies, which at present have tbB 
undisputed and absolute control of the commeroe of tbB 
eountzy. 

It may be asked upon what principle we advocate the making 
of canals, and the provision of slack-water navigation, and at 
the same time oppose the construction or control of railroads 
by the general government. The answer is obvious. The title 
to the navigable waters of the country cannot pass to or vest 
in private companies or individuals. The government itself 
has not the authority to d .vest the int /rest and rights of the 
public in and to the waters of the United States; they must 
remain free and open to use by any and all the people of the 
country. The general government has jurisdiction over them, 
not for taking tiieir use from the whole people, and conferring 
the right to navigate them upon ccrcain classes or corporatioiis, 
but for the purpose of keeping them free for the uses of navi- 
gation as well as to remove and prevent obstructions. Naviga- 
ble waters being natural public highways, and the constitution 
wisely placing their absolute control in the hands of the gem- 
eral government, the duty of making them available for public 
use is a necessary adjunct to the power and jurisdiction already 
conferred. The compact, or contract, entered into between the 



OONGLU8ION. 889 

States, being for the benefit of all the people of all the states, 
and the control of these navigable streams having been sur- 
rendered by the states to the general government, it follows 
that the creation of slack-water navigation and the making of 
canals by the national government is the legitimate exercise 
of a constitutional power. And when the power thus vested 
shall have been exercised, and continuous channels or water 
highways shall have been opened from the great agricultural 
districts of the south and west to the east, the monopoly now 
enjoyed by the railroads will cease. Com, shipped from Iowa 
to Boston, instead of allowing the owner a margin of thirteen 
cents per bushel over the cost of transportation will net him 
fi^m forty to fifty cents per busheL 

The advantage of these water highways cannot be over-esti- 
mated. They are not subject to the control of any company, 
dass, or combination of men, but are open to alL The right 
to place boats and vessels upon them, and to navigate them, 
is as unrestricted as the right to use the public roads of the 
country. Competition would be unlimited, and cheap trans- 
portation the result. At the present time, with limited water 
communication during the navigable season, when the water 
routes come in competition with railroads, freights are carried 
over railroads for less than one-haLT the rates charged when 
winter has closed the competition. 

The question of the cost of furnishing water communication 
to the seaboard markets is of but little moment when we 
remember the princely donations made by the government to 
railroad companies. Less would be required to relieve the 
whole people from the oppression of railroad companies than 
has been bestowed upr.n these monopolies and used by them to 
oppress and rob the producing portions of the country. The 
sums demanded to furnish water communications would be 
expended for the benefit of the whole people, and if they were 
taxed for the means to prosecute the work, it would be for 
their own direct interest, and not for the purpose of enriching 
private corporations. 

It may be objected that water transportati< •! not be 
practicable in all parts of the country at all i Tme ; 



MS uaaoTOum ajxd tbk pboiul 



iMit it ooilld be used to move most of tiie | 
to Idbe eaat daring the nftvigable seasoB, «tid it iroMimitm Hhi 
efleet to destroy the monopoly now impoyeruhiiig tikefftniMi 
df the Ipeet^ sad wbkib. entaik npon the east « eeat^oiJitniBg 
lit ont of ffofiortidn to the reel neeeflsitiee of the ene. 8ke 
fedaoed price of transportation would aUow a fidr ]^oit toitHa 
fppdnoer oH less prices than now obtain in the eaat W$ jftai 
taate: Take the instance <^ five car loads o£oom 
ahipped from Iowa to New York. It was shipped to < 
owr the Korthwestem railroad; thence to New Yozk dier Hm 
North Bhore and Erie lineS) and there sold for fiftgr^te tad 
% hAlf cents per bnsheL The charges for 
ainounted to fbrty-^ight and a half cents per budisL 
shiipper got eight cents jper huahd fot his eam^J 
iaatiaioe: A lot of com was bought in Iowa for fl iii io ea ^ 
fir bndiely and sold in Sixringfieldy MBSsachiiS6il% inr i 
QUie emts. The chaiges for transportation, etc, were iAg^ftM 
eeiits per bushel. The man who purchased in Iow» iN^ ikb-* 
tem cents had left ene cent per bushel over cost, all biAiMvw 
teen of the sixty-nine cents being absorbed by tiie ndlioiid 
eompanies. If we take as authority the published statementa 
of railroad companies, they could have made a fair profit xm 
these shipments at ten or twelve cents per bushel If only a 
fair rate had been charged, the farmer in Iowa could have sold 
his com for thirty, instead of thirteen cents, the consumer in 
tiie east could have bought for less, and the shipper would 
have made a reasonable profit on his investment. The same 
state of facts apply to other products. Indeed the rule is to 
diarge higher rates for wheat, because it will bear a greater 
pressure. If we had water commimicat'on from the west to 
the east, this wholesale extortion would cease. Oompetition 
would compel railroad companies to reduce tiieir rates to an 
honest standard. 

It is believed by many that if the general government were 
to take the control of the railroads, the evils of which we have 
been treating would be corrected. We have already expreaaed 
our views npon this proposition. If it were practicable, still 
it would not afford relief. No matter who owns the roada^-* 



oovcLTmos. 841 

whether goyemment or private corporations — ^relief cannot be 
folly afforded without greatly increased capacity; and were 
that capacity ample for the carrying trade of the whole conn- 
try, the main desideratum — cheap transportation — ^would still 
be wanting. The cost of the roads — the expense of operating 
them — the rapid wear, requiring great outlay for repairs — 
their perishable character, and the necessity of their being 
under the exclusive care and control of private parties, and 
not open for the free use of all who might choose to engage in 
the business of common earners, negative the idea that trans- 
portation by rail can ever be as cheap as by water. 

With proper facilities for commerce throughout the whole 
country, and such as will enable the great agricultural centars 
to ship at such rates as to allow their products to reach the 
sea^board without their value being destroyed or seriously im- 
p^red by charges for transportation, our producers, who are 
now scarcely able to make current expenses, would, with the 
markets of the east and of the world thrown open to them, 
receive a fair return for their investments and constant toil 
We cannot expect to reach these desirable ends without water 
transportation. When the people bocome fully alive to the 
iippprtanpe of this great measure its accomplishment will not 
be long deljayed. 

l^his kind of improvement the general government can law- 
fyjiy make, and an expenditure of a small part of the 
weflkUh bestowed upon private railroad corporations would 
oj^ up water channels, affording cheap transportation from 
l^e WQst to the east and south. Grain and meats could then 
be iihipped to the seaboard at such rates at would warrant their 
transportation to foreign markets, which, with the abolition of 
protective duties, would furnish the farmer a good sale for his 
products, and an opportunity of purchasing his supplies free 
from the bounty he now pays the eastern manufacturer. With 
such means for shipping the farm products of the west and 
south, with protective tariffs abolished, and the financial policy 
of the nation so changed as to furnish to the people the same 
k;ind of money used by the government, with " specie pay- 
jp^ont " resiumedy and the large margin between coin and paper 



843 HONOFOLIB8 AND THB FBOFLB. 

removed, prosperity would again attend farming pnmiitBy md 
contentment would fill the land. 

With all the advantages Providence has given hb in this 
great country, with the pure and simple republic bequeathed to 
us by the heroes and statesmen of Seventy-Six, we ought to be 
a prosperous and happy people. But, with the blighting corse 
of oppressive monopolies fastened upon us, upheld by bought 
legislation and strengthened by the decisions of judges and 
courts, who, from education, occupation, and sympathy with 
the oppressors of the people, or from baser motives, have 
become the special guardians of the monopolists, the laboring 
and producing classes find it difiicult to live, and in many 
instances are being reduced to absolute want The &nner has 
abundant harvests, but their value is absorbed in oppressive 
charges for transportation to market, and he is bound down 
with onerous and unequal taxes until his labor has ceased to 
be remunerative. While this is true of most industrial pur- 
suits, the manufacturer, protected by the government, the 
moneyed men in Wall street, who operate in gold and stocks, 
and the railroad men who are protected by the decisions of the 
courts of the country, all amass princely fortunes — the result of 
special privileges bestowed upon them. As a necessary conse- 
quence the interests of the country are being divided. A 
moneyed " nobility " are arrayed against the laboring and pro- 
ducing classes. Special privileges, at war with republican 
institutions, are granted them ; their wealth is virtually 
exempted from taxation, and they are fast becoming the gov- 
erning power, while those who produce the wealth of the 
country are compelled to spend their strength and devote their 
lives to the business of adding to the wealth of their oppres- 
sors. It may be asked why this state of things exists. There 
are two reasons for it. First, the indiiJerence manifested by 
the people to the affairs of the government; their willingness 
to allow others to direct and control the affairs of the nation, 
while thev devote their time to their own personal interests, 
seemingly forgetful that they have any interest in national 
affairs, or in the administration of their own state govern- 
ment, and permitting those who now oppress them to shape 



OONGLUSION. 848 

legislation, and to obtain those grants and privileges which 
have now become the means of their oppression. The second 
cause is the disposition of those in power to override and dis- 
regard constitutional restrictions. During the civil war the 
constitution possessed no restrictive force. The law of neces- 
sity governed; the personal will of those in office was the 
supreme law. Acts of congress were passed with direct refer- 
ence to a state of war, and decisions of courts were controlled 
by the same causes. With the return of peace these laws 
remained unrepealed ; the decisions of courts remained unre- 
versed; constitutional restrictions were deemed irksome and 
of little moment. Laws remained on our statute book which 
contravened the plain provisions of the constitution, and the 
decisions of courts have continued in the same ckannel, until 
the great charter of our civil liberty has become obsolete, and 
the personal opinions of courts, like the edicts of a monarch, 
have become the supreme law. Under this species of legisla- 
tion, and this class of decisions, these great oppressions of the 
country have grown up until their power is superior to that 
of all other interests, and not unfrequently defies the law. 
The first great reform to be effected is to reestablish the 
supremacy of the constitution, and to demand of courts and 
legislators a strict observance of its provisions. When this 
is effected, the rights of the states and the people will be 
protected. The courts of the United States, and all other 
departments of the government, must remember that in our 
republican system the federal government is limited and 
restricted to the exercise of such powers as are expressly 
delegated to it, and that all attempts to confer special charters 
and privileges upon private companies are usurpations. They 
must remember that we have no government with kingly pre- 
rogatives; that in a republic the people retain control of the 
purse and aword^ and that the liberties of the people, the 
equality of all before the law, as well of the perpetuation of 
republican institutions, are in the care and keeping of the 
sovereign people. 

That there should be some means adopted to arrest this 
great and growing power of corporations is now forcibly 



844 HONOFOLIEB AND THE FBOFLB. 

demonstrated. 8inoe writing the preceding pages, still anoflwr 
fatal stab has been given to the repablic. Yanderbilt^ tlie 
leader in the raid made by corporations upon the libertiei of 
the ^ople, and also an operator in Wall street gambling, has 
added to the other roads under his control the Lake Shore A 
Michigan Sonthem railway, and now controls the oonuneroe 
of* the west with the seaboard, and can fix the price of a barrd 
of flour, or bushel of wheat or com, and from his decision 
there is no appeal. Extending these monopolies still fiirther, 
Yanderbilt and his co-conspiritors are about to take control 
of all the telegraph lines in the country, and dictate to the 
whole people the price to be paid for dispatches. Thus ibeae 
enemies of republican government are surely getting control 
of all the bvsiness and commerce of the country. The finances, 
the carrying trade, the produce market, the price and sale of 
manufactured articles, and the means of oommunicaticm 
between the different portions of the country, are all passing 
into the hands of the enemies of the people. At the present 
time if any railroad company attempts to act indepeadently 
and honestly, this combination of sharpers and swindlers 
make war upon it and force it to surrender, or drive it into 
bankruptcy. 

No wonder that the people are becoming alarmed, and are 
preparing for the conflict. The attempt made to dissolve the 
Union was an open and bold one. The people met the issue 
and triumphed. The attempt made to divide the countiy 
aroused the national patriotism. The attempt of this great 
combination of monopolists to obtain absolute control of the 
government, the finances, and commerce of the country, pre- 
sents more serious cause for alarm than did the attempt to 
dissolve the Union. Our institutions cease to be of any value 
when they are perverted to means of oppression. Wben men 
in high ofiicial positions trifle with the liberties of the people 
and encourage their oppressors, an indignant constituency 
should hurl them from power. If, knowing the wrongs that 
are committed against us, the encroachments being made on 
our liberties, the threatened and partially accomplished 
destruction of republican, institutions, we silentiy acquieflce^ 



OONCLUBION. 945 

we are not freemen, and we deaerve to be held as the bond- 
servants of our oppressors for all time to oome. Bnt while 
the people are long-suffering and patient imder adversi^, 
there is a point beyond which their oppressors cannot venture 
without arousing them to action. That point is now reached; 
the fiat of the sovereign power in this land has gone forth; the 
voice of the people is heard fi^m all portions of our common 
country demanding redress, and that the government shall be 
brought back to constitutional limits; that the power of their 
oppressors shall be destroyed; that their rights as freemen 
shall be restored to them; that the halls of legislation and the 
courts of justice shall be filled by men who do not legislate 
for bribes, and who administer justice without respect to 
persons or interests, and prize constitutional restrictions and 
the liberties of the people above the interests of corporations 
and rings formed to oppress them. If redress cannot be 
obtained at the ballot-box; if the influences which now control 
the government and business of the country cannot be over- 
come; if redress is denied in legislative halls and in the 
courts — then the people have the right, the ^God-given 
right," to arise in their sovereign power and take what their 
servants have refrised to give them. If reform cannot be 
obtained, or the wrongs of the people redressed in any other 
method, a resort should be had to revohOian — peaceable, if 
possible, but such as will bring the qpuntry back to the days 
of its purity, and compel all to acknowledge the Mcred bind- 
ing force of the constitution. 

In closing, we desire to remind the reader of the binding 
form of the constitution, which seems to be entirely disre- 
garded by legislators and courts, in their efforts to strengthen 
the power that now curses the nation. Our ideas of the invio- 
lable nature of constitutional provisions may be considered 
antiquated, and our belief that its provisions have been disre- 
garded may be deemed mere fimcy; yet we cannot shut our 
eyes to the fact that special favors have been granted to classes, 
by the legislation of states and the nation; that this kind of 
legislation has deprived the people of rights guaranteed by the 
constitution; nor are we ignorant of the iuA that this special 



346 MONOPOLIES AND THE PEOPLE. 

class legislation has received the sanction of the conrts. If 
the binding force of the fdndamental law is disregarded, the 
people are left without any legal means for recovery of their 
rights. 

A government based upon a constitution is, and must be 
unchangeable, save by alter ation ^ f, or amendment to its con- 
stitution. Any attempt to aHWit its meaning or destroy its 
force by legislation or by judicial decision, because it may be 
deemed expedient to do so, or because an emergency may 
demand it, is incipient revolution, persisted in, it will even- 
tually destroy constitutional government and supply in its 
stead, one that has no basis, other than the will of those in 
power. We have attempted to show that in the legislation of 
congress, as well as in that of some of the states, in favor of 
monopolies that now oppress the country, and also by the 
decisions of courts sustaining such legislation, we, as a nation 
had arrived at the point where the personal views of those in 
power were the sole rule of action, and that in fact the binding 
force of the fundamental law had ceased to have any control 
over them. The continuance of our republic as well as the 
prosperity and security of the people, demands a return to 
constitutional government. 

We say that the legislative power conferred upon congress is 
limited. Article one, section one, of the constitution, says: 
" All the legislative powers herein granted shall be vested in a 
congress of the United States, which shall consist of a senate 
and house of representatives." No general power of legisla- 
tion is vested in congress. Its legislation is restricte*!. 

No where in the powers granted to congress ciin be found the 
power to charter railroads or other private coiporations, nor 
can it be /jnplied from any power that is vested in congress, 
norie the ;5franting of such charters necessary to the execution 
of any granted power. As a nation we have long admitted 
that congress Imd the power to enact laws for the protection of 
manufacturers known as " protective tariiF acts," yet it may 
well be quest ioned whether sujjh a power is vested in it. No 
one will dou^ ot its power to levy and collecit tariff duties for 
revenue puq x^ses, but t]}§ question of a tariff for protection is 



^ 



CONCLUSION. 847 

another thing, and the right to provide by law for a tariff for 
protection alone cannot be fonnd in any part of the constita- 
tion. We refer to this for the purpose of showing how ready 
we are to accept as constitutional any and all acts of congreeSi. 
For the purpose of making onr point let ns see what is the 
power conferred upon congress. Article one, section eight, 
" Congress shall have power to lay and collect taxes, dnties, 
impo/te and excises to pay the debt and provide for the 
common defence and general welfa/re of the United States ; 
bnt all duties, impd/ts and excises shall be uniform throughout 
the United States." K a power to provide a tariff by statute 
for protection is given to congress, it is contained in the para- 
graph above quoted. Eevenue can only be collected for 
governmental purposes under this provision. The fact that 
statutes have been passed for the protection of certain clas6e$ 
of citizens by discriminating in their fSstvor; that without any 
provisions of the constitution conferring the power ^to pass 
such statutes upon congress and that the people have not ques- 
tioned their constitutionality demonstrates the ease with which 
constitutional provisions can be disregarded and the rights of 
the people taken from them. Again the constitution vests in 
congress authority to regulate commerce with foreign nations 
and among the several states, and also ^^ To establish post 
offices and post roads." If any power is conferred upon con- 
gress to charter private corporations or joint stock companiea, 
other than banking and financial institutions, such power is 
derived from the provisions last quoted. Let us not forget that 
the congress of the nation is not ^othed with general powers 
like the legislature of a state, but that its powers are special 
and specified in the constitution, and we will better understand 
the extent of its usurpations of power in chartering and 
endowing private corporations with the people's lands and 
money. It does not require a vast amount of legal knowledge 
to decide that congress in granting charters to private corpor- 
ations organized for pecuniary profit has disregarded both the 
letter and spirit of the constijbution. That it has done when 
the plea of necessity could not be urged in favor of the act ; 
when nothing but a desi^^ ties in their efforts 



848 MONOPOUEB AKD THE FBOPLB. 

to enrich themBelves by appropriationfl of the public moiieyi 
and land conld have inflnenced its action. CongreBS has the 
power ^^To coin money, regulate the value thereof and of 
foreign coin and to fix the standard of weights and meaeures :" 
" To bcHTOw money on the credit of the United States." These 
are the only provisions of the constitution touching upon the 
question of numey and indebtedness of the United States. 

If the constitution confers upon congress the power to make 
fuiything but cam ''money or legal tender," that power is 
derived from the above quoted provisions. Can such a power 
be fidrly deduced from these provisions? No act of congreas 
has tended so greatly to centralize the wealth of the countiy 
and place all the money of the nation in the hands of the few 
as the act known as the legal tender act. Yet the power to 
pass it cannot be derived from any provisions of the constita- 
tion without perverting and destroying its meaning. The 
constitution vests in congress the power to coin money, and 
congress assumed the power to pass an act declaring that^MM^ 
due, dishonored treasfwry notes shall be accepted as coin in 
payment of debts. It has declared that an irredeemable cur- 
rency, an unmitigated cheating device threatening the gravest 
injury to all persons, excepting the favored class of subsidied 
private corporations, stock jobbers and speculators shall be the 
best money the people shall be permitted to own or use, and 
pretend that this species of legislation is authorized by the 
constitution. We have quoted the provisions of the constitu- 
tion, controlling legislation on some of the subjects we have 
been discussing for the purpose of showing how entirely this 
great charter of our liberty is disregarded by our law-makers 
when some favorite object is to be achieved. On the ques- 
tion of protective tariif, the creation of private corporations 
and the legal tender act, congress seems to have lost sight of 
the country at large and in aid of the " favored few " trampled 
upon the fundamental law, and reduced the people to a state 
of vassalage to a class of oppressors, whose creation dates 
from the destruction of constitutional restrictions. Is it 
strange that a people taxed oppressively to supply money to 
parties receiving special lavors from the generjJ government; 



OONOLUBION. 849 

with from one-lialf to three-fonrths of the proceeds of their 
daily toil taken from them to emich private corporations, lordly 
mannfactnrers and rings of stock jobbers and Wall streeft 
gamblers, *8honld be alarmed at the encroachments that are 
being made upon their liberties? The perpetuity of our 
govemmenti as well as the preservation of the rights of the 
people, demand that all the departments of the national 
administration should abstain from frirther assumptions of 
powers, not granted to them. 

Not all the oppressions and abuses practiced by railroad cor- 
porations, and other parties receiving special &von from oon^ 
gress, or the immense influence they now wield in the affidrs 
of the nation, are fraught with consequences as fatal to the 
rights of the people as the seeming disregard of constitutional 
guarantees and restrictions by the congress of the United 
States. 

The constitution is being changed and its provisions amended 
— ^not in the manner provided, but by congressional usurpa- 
tion. A dangerous precedent has been established. The letter 
and spirit of the great charter of our liberty have been oblit- 
erated. A privileged class, with extraordinary powers, has 
been placed over the people, by acts of congress at war with 
republican principles, and in violation of the plain letter of the 
fundamental law of the land. Under the fostering care of a 
congress presumed to act for the whole people, and for the 
protection of their interest, giant corporations have been crea- 
ted which now own and control more wealth and money than 
all the other interests of the people combined. Their influence 
in the affairs of the nation, and on tHe commerce of the coun- 
try is more powerM than that of all the departments of the 
government, backed by the whole American people. 

We do not mean to say that these corporations actually own 
more than one-half of the wealth of the nation, but that their 
power is so great that they fix the value upon the property or 
wealth of more than one-half of the whole country, and that 
because of the special favors shown them they now control the 
afiirs of the nation. Not only so, but they defy the power 
of the general government Suits are being commenced 



860 MONOFOUEB AND THE FBOPLB. 

dgainst the Credit Mobilier company by the general goTern- 
ment. Does any one familiar with the matter believe i^ can 
be prosecuted to a snccessfol termination? The nnrefitricted 
powers and privileges conferred upon the Pacific TSail Bead 
companies, and their close connection with the Credit Mobilier 
company, will enable them to defy and defeat the government. 
All the great powers and privil^s conferred npon the private 
corporations of the country by congress were conferred in vio- 
lation of the great charter of our liberty, and we now aie 
compelled to witness the spectacle of the creature defying the 
power of its creator; oppressing the people; controlling the 
commerce of the country, and managing its finances becaoae 
congress ventured upon the dangerous experiment of giving to 
the constitution an interpretation not warranted by its letter 
and spirit. By this kind of legislation the basis of our politi- 
cal system has been destroyed. The people respect and observe 
the charter of their liberties, and no innovation has been made 
upon it in their interest or for their benefit It is noticeable 
that all the encroachments made upon it have been in the 
interest of the corporations, companies, and classes whose 
interests are at war with those of the people. That not only 
acts of congress but decisions of the courts sustaining those 
acts have all been in favor of the classes, corporations, and 
rings of stock-jobbers and Wall street gamblers, who are united 
in making war upon the people and the government. We have 
not heeded the admonitions of Washington in his farewell ad- 
dress, and the disastrous consequences of our reckless course 
predicted by him are now upon us. In his farewell address, 
Washington said : " The basis of our political system is the right 
of the people to make and alter their constitutions of govern- 
ment, but the constitution which at any time exists, tiU changed 
by an explicit and authentic act of the whole people, is sacredly 
obligatory upon all. The very idea of the power and the right 
of the people to establish government pre-supposes the duty 
of every individual to obey the established government." He 
further says: "Towards the preservation of your government, 
and the permanency of your present happy state, it is requisite 
that you steadily discountenance irregular opposition to its 



t' 



00KGLU8ION. 861 

acknowledged authority, bnt also that jon resist with care the 
spirit of ijvnovation v/pon its principles^ Jiowever specious ths 
pretext. '^^ Further on, in the same address, he says: "It ia 
important Kkewise that the habit of thinking in a free conntry 
shonld inspire caution in those intrusted with its administra- 
tion to conline themselves within their respective constitutional 
spheres, avoiding in the exercise of one department to encroach 
upon another. The spirit of encroachment tends to consoli- 
date all the departments in one, and thus to create, whatever 
the form of government, a real despotism." 

We have shown, in treating of courts, that they have as- 
Bumed the province of the legislative department of govern- 
ment, and have, by judicial legislation, become absolute rulere 
of the whole country. The supreme court has disregarded the 
admonition of Washington, and, by assumption of power, it is 
converting our republic into a despotism. But »the evil most 
to be dr^ided, and against which the immortal Washington 
warned us, has overtaken us, and we now realize its disastrous 
consequences — that is, constitutional change by usurpation. 
He warns us of this danger in the following language: "If, in 
the opinion of the people, the distribution or modification of 
the constitutional powers be, in any particular, wrong^ let it be 
corrected by an amendment in the way the constitution desig- 
nates. By;t let there he no chcmge by vswrpaMony for though 
this in one instance may be the instrument of good, it is the 
customary weapon by which governments are destroyed. The 
precedent must always greatly overbalance, in permanent evil, 
any partial or transient benefit which the use can at any time 
yield." 

It will be recollected that the courts of the United States 
are not courts of general jurisdiction, but that their jurisdic- 
tion is defined and limited by the constitution. Of course, 
within the prescribed limits their jurisdiction is superior. We 
have shown the encroachments made by congress and the 
supreme court upon the fundamental law, and have referred to 
■ome of the influences that have promoted those encroach- 
ments. Their effect is seen and known by all. In no way can 



852 MQNOFOLIEB AND THE FBOFLB. 

the rights of the people and of the government in its pnritj be 
preserved and perpetuated save bj the restoration and preserra- 
tion of the saf<^ards contained in the constitntion. We may 
effect a thorough charge of the persons who fill the ezecativey 
legislative, and judicial departments of the government; ire 
may till all the offices in the whole nation with men pledged 
to reform; We may secure legislative and congressional enact- 
ments in favor of, and may succeed in effecting temporary 
reform; the people may be relieved from present oppressions 
and extortions; statutes may be passed designed to prevent 
future abuses; but unless we awake to the necessity of a full 
and complete restoration of all the constitutional guarantioa 
and restrictions, which, by legislative and judiciary usurpationSy 
have been overridden, and for the time being destroyed, no 
lasting or permanent reform caii be effected. 

We witness the vast and constantly increasing power of rail- 
road corporations; we see them strengthening and combining 
their forces; we witness the fact that a few master spirits, like 
generals-in-chief, command, manage, and direct the whole rail- 
road force of the country; we hear these great generals of this 
force issue their edicts to the farming and producing industries 
of the country, commanding them to increase their contribu- 
tions to their task-masters, and we know that as the matters 
are now shaped, the people must submit. We know that these 
same generals of the corporate forces of tlie country are in 
league with Wall street gamblers and speculators for the pur- 
pose of controlling the finances of the country. We know that 
utter and financial ruin is stayed by the secretary of the treas- 
ury, who is compelled to fight the bulls in Wall street. We 
see the effect of the legal tender decisions in the large exporta- 
tions of gold to Europe, and its absence from our midst. We 
know that this same combination, under the lead of the same 
commanders, have almost the entire control of the banks at 
the great commercial centres. We know that these enemies 
of the people, by fraud, corruption, and deceit, have obtained 
untold amounts of money and land, enough to make vast em- 
pires, from the people. We all feel assured that if the truth 



ooNOLUHiaN. 853 

has been told, tliat this same corrapt body of men have bongbt 
legielative grant8,'ai)d in some instances have bought the deds- 
iong of courts. This same corporate power has been practicallj 
exempt from taxes, while the people have been compelled to 
make larger contributions to supply the deficit. We see these 
corporations defying the government and the people, overriding 
laws, and refusing to obey the orders of courts. We know 
that they have taxed the people in charges for transportation 
until labor ceases to be remunerative, while the proceeds of the 
laborer's toil go to fill the cofiers of Wall street speculatprs. 
We know that honesty and morality have departed from these 
men ; that being possessed of vast wealth and unlimited credit 
to-day, they venture it all in a simple gambling operation, and 
on to-morrow they are bankrupt, and their creditors are ruined. 
We see this struggling, gambling, battling mass of men in 
Wall street, striving for the supremacy ip finand^ circles, 
alternating from vast wealth to abject poverty, intent on sudden 
riches, while the people of the whole country are subsidized 
to supply immoral, polluted Wall street gamblers with the 
money with which to ply their vocation. This giant of oppres- 
sion and corruption has developed itself within the last few 
years. It is anti-republican, and threatens the existence of the 
government. Its vise-like grasp has siezed the vitals of the 
nation. It had its origin in unconstitutional legislation; it 
has been supported from the same fountain. All attempts at 
reformation will be of no avail unless we strike at the fountain 
head. The watchword of all who are battling for their rights 
should be, '^ The repeal of all unconstitutional acts of congress, 
and a strict interpretation of the constitution by the courts." 
With constitutional liberty restored to the people, the abuses 
practised by corporations reformed, their assumed power taken 
from them, and all their rights and privileges defined and pre- 
served, prosperity will again attend us, and our country will 
again own a happy and contented people. 

Having an abiding confidence that the reform being inaugu- 
rated by the farmers of the country will advance to a triumph- 
ant issue, we present this volume to th^ public as a humble 
28 



864 MONOFOUBS AKD THE FBQFLB. 

but honest champion of the canfie, acknowledging its imper- 
fections, expecting criticisms and condemnations from the 
monopolists and their dependents, bnt asking a carefiil peroBal 
and earnest consideration of the doctrine advocated. 



APPENDIX. 



APPENDIX. 



CHAPTER I. 

AS our position on the '^ Legal Tender" decisionB and their 
effect upon the finances and commerce of the conntrj 
have been controverted by some of the legal msn to whom 
we have shown our mannscript, at the risk of wearying the 
reader, we quote the dissenting opinions of the late Chief Jus- 
tice Chase and his associates, on the points at issne in thoee 
cases, feeling assured that these opinions fully sustain us. If 
our views are correct as to the effect of these decisions upon 
the best interests of the country, and their tendency to increase 
the power of the combinations that now have such control over 
the different departments of the government, as well as the 
financial and commercial interests of the country, it follows 
that no real relief from the oppressions under which the people 
are suffering can be obtained until the legal tender statutes are 
repealed and the latest decisions of the supreme court as to 
their constitutionality and scope are reversed. 

We have claimed that those decisions were in conflict with 
the provisions of the constitution. Our position is supported 
by the opinions quoted. We have said that the supreme court 
of the United States was reorganized in the interests of rail- 
road corporations and other monopolies, before the legal tender 
questions were re-argued and reversed. The opinions quoted 
sustain us in this particular. But we desire the reader to 
examine these opinions and determine for himself. 

(867) 



OHAPTEE II. 



DlfiBBNTING OPINION OF CHIEF JUtfllOB 



WE dissent from the argument and conclusion in the 
opinion just announced. 

The rule by which the. constitutionality of an act of ocm- 
gress passed in the alleged exercise of an implied power ia to 
be tried, is no longer, in this court, open to question. It was 
laid down in the case of McCvUoch v. Ma/ryla/ndj by Chief 
Justice Marshall, in these words : '^ Let the end be legitimate, 
let it be within the scope of the constitution, and aU means 
which are appropriate, which are plainly adapted to that end, 
which are not prohibited, but consistent with the letter and 
spirit of the constitution, are constitutional." 

And it is the plain duty of the court to pronounce acts of 
congress not made in the exercise of an express power, nor 
coming within the reasonable scope of this rule, if made in 
virtue of an implied power, unwarranted by the constitution. 
Acts of congress not made in pursuance of the constitution are 
not laws. 

Neither of these propositions was questioned in the case of 
Hepburn v. Griswold, The judges who dissented in that case 
maintained that the clause in the act of February 25th, 1862, 
making the United States notes a legal tender in payment of 
debts, was an appropriate, plainly adapted means to a constitu* 
tional end, not prohibited, but consistent with the letter and 
spirit of the constitution. The majority of the court as then 
constituted, five judges out of eight, felt " obliged to conclude 
that an act making mere promises to pay dollars a legal tender 
in payments of debts previously contracted is not a means 
appropriate, plainly adapted, really calculated to carry into 
effect any express power vested in congress, is inconsistent with 

(868) 



AFPESDOL 859 

the spirit of the constitation, and ia prohibited by the oon- 
Btitution." 

In the case of The United States v. De Witty we held nnani- 
monsly that a provision of the internal revenue law prohibit- 
ing the sale of certain illuminating oil in the states was uncon- 
stitutional, though it might increase the production and sale 
of other oils, and consequently the revenue derived from them, 
because this consequence was too remote and uncertain to war- 
rant the court in saying that the prohibition was an appropri- 
ate and plainly adapted means for carrying into execution the 
power to levy and collect taxes. 

We agree, then, that the question whether a law is a neces- 
sary and proper means to execution of an express power within 
the meaning of these words, as defined by the rule — that is to ' 
say, a means appropriate, plainly adapted, not prohibited, but 
consistent with the letter and spirit of the constitution — is a 
judicial question. Congress njay not adopt any means for tl^e 
execution of an express power that congress may see fit to 
adopt. It must be a necessary and proper means within the 
fair meaning of the rule. If not such it cannot be employed 
consistently with the constitution. Whether the means actu- 
ally employed in a given case are such or not the* court must 
decide. The court must judge of the fact — congress of the 
degree of necessity. 

A majority of the court, five to four, in the opinion wliich 
has just been read, reverses the judgment rendered by the 
former majority of five to three, in pursuance of an opinion 
formed after repeated arguments, at successive terms, and care- 
ful consideration, and declares the legal tender clause to be 
constitutional; that is to say, that an act of congress making 
promises to pay dollars legal tender as coined dollars in pay- 
ment of preexisting debts is a means appropriate and plainly 
adapted to the exercise of powers expressly granted by the 
constitution, and not prohibited itself by the constitution, but 
consistent with its letter and spirit. And this reversal, unpre- 
cedented in the histoiy of the court, has been produced by no 
change in the opinions of those who concurred in the former 
judgment. One closed an honorable judicial career by resigna- 



360 MONOFOUIS ASD THE FBQFLB. 

tioD after the case had been decided, after the opinion bad ban 
read and agreed to in conference, and after the day when it 
would have been delivered in coart, had not the ddivery been 
postponed for a week, to give time for the preparation of the 
dissenting opinion. The court was then fidl, bat the vacancj 
caused by the resignation of Mr. Justice Orier having been 
subsequently filled, and an additional justice having been 
appointed under the act increasing the number of judges to 
nine, which took effect on the first Monday of December, 1869, 
the then majority find themselves in a minority of the comti 
as now constituted, upon the question. 

Their convictions, however, remain unchanged. We adhflfe 
to the opinion pronounced in ffepbtimy. Orimoold. Befleetion 
has only wrought a firmer belief in the soundness of the con- 
stitutional doctrines maintained, and in the importance of them 
to the country. 

We agree that much of what was said in the diaoenting 
opinion in that case, which has become the opinion of a major- 
ity of the court as now constituted* was correctly said. We 
fully agree in all that was quoted from Chief Justice Marshall 
We had indeed accepted, without reserve, the definition of 
implied powers in which that great judge summed up his 
argument, of which the language quoted formed a part But 
if it was intended to ascribe to us " the doctrine than when an 
act of congress is brought to the test of this clause of the con- 
stitution," namely, the clause granting the power of ancillary 
legislation, *' itB necessity must be absolute, and its adaptation 
to the conceded purpose unquestionable," we must be permit- 
ted not only to disclaim it, but to say that there is nothing in 
the opinion of the then majority which approaches the asser- 
tion of any such doctrine. We did indeed venture to cite, 
with approval, the language of Judge Story in his great work 
on the constitution, that the words necessary and proper were 
intended to have " a sense at once admonitory and directory," 
and to rc<|uire that the means used in the execution of an 
express })<»\ver "should he bona fde^ appropriate to the end," 
and also ventured to say that the tenth amendment, reserving 
to the states or the people all power not delegated to the United 



AITENDIX. 361 

States by the constitution, nor prohibited by it to the states, 
" was intended to have a like admonitory and directory sense," 
and to restrain the limited government established by the 
constitution from the exercise of powers not clearly delegated 
or derived by just inference from powers so delegated. In 
thus quoting Judge Story, and in this expression of our own 
opinion, we certainly did not suppose it possible that we could 
be understood as asserting that the clause in question " was 
designed as a restriction upon the ancillary power incidental 
to every grant of power in express terms." It was this propo- 
sition which *• was stated and refuted " in McCulloch v. Mary- 
land. That refutation touches nothing said by us. We assert 
only that the words of the constitution as much as admonish 
congress that implied powers are not to be rashly or Ughtly 
assumed, and that they are not to be exercised at all unless, in 
the words of Judge Story, they are " bona fde appropriate to 
the end," or, in the words of Chief Justice Marshall, " appro- 
priate, plainly adapted " to a constitutional and legitimate end, 
and " not prohibited, but consistent with the letter and spirit 
of the constitution." 

Tliere appears, therefore, to have been no real difference 
of opinion in the court as to the rule by which the existence 
of an implied power is to be tested, when Hepburn v. OrUtJoold 
was decided, though the then minority seemed to have sup- 
posed there was. The difference had reference to the applica- 
tion of the rule rather than to the rule itself. 

The then minority admitted that in the powers relating to 
coinage, standing alone, there is not '^ a sufSdent warrant for 
the exercise of the power" to make notes a legal tender, but 
thought them " not without decided weight, when we come to 
consider the question of the existence of this power as one 
necessary and proper for carrying into execution other admit- 
ted powers of the government." This weight they found iA 
the fact that an " express power over the lawful money of the 
country was confided to congress and forbidden to the states." 
It seemed to them not an " unreasonable inference " that, in a 
certain contingency, "making the securities of the government 
perform the ofiSce of money in the payment of debts would be 



362 MONOPOLIES AND THE PEOPLE. 

in harmony with the power expressly granted to coin money." 
We perceive no connection between the express power to coin 
money and the inference that the government may, in any 
contingency, make its securities perform the functions of 
coined money, as a legal tender in payment of debts. We 
have supposed that the power to exclude from circulation 
notes not authorized by the national government might, 
perhaps, be deduced from the power to regulate the value of 
coin; but that the power of the government to emit bills of 
credit was an exercise of the power to borrow money, and 
that its power over the currency was incidental to that power 
and to the power to regulate commerce. This was the doctrine 
of the Veazie Bank v. FennOj although not fiilly elaborated 
in that case. The qu^tion whether the quality of l^al tender 
can be imparted to these bills depends upon distinct consider- 
ations. 

Was, then, the power to make these notes of the govern- 
ment — these bills of credit — a legal tender in payments an 
appropriate, plainly adapted means to a legitimate and consti- 
tutional end? or, to state the question as the opinion of the then 
minority stated it, " Does there exist any power in congress, or 
in the government, by express grant, in execution of which this 
legal tender act was necessary and proper in the sense here 
defined and under the circumstances of its passage?" 

The opinion of the then minority affirmed the power on the 
ground that it was a necessary and proper means, within the 
definition of the court, in the case of McCulloch v. Mary- 
land^ to carry on war, and that it was not prohibited by the 
spirit or letter of the constitution, though it was admitted to 
be a law impairing the obligation of contracts, and notwith- 
standing the objection that it deprived many persons of their 
property without compensation and without due process 
of law. 

We shall not add much to what was said in the opinion 
of the then majority on these points. 

The reference made in the opinion just read, as well as in 
the argument at the bar, to the opinion of the chief justice, 
when secretary of the treasury, seems to warrant, if it does not 



APPENDIX. 363 

require some observations before proceeding further in the 
discussion. 

It was his fortune at the time the legal tender clause was 
inserted in the bill to authorize the issue of United States 
notes and receive the sanction of congress, to be charged with 
the anxious and responsible duty of providing funds for the 
prosecution of the war. In no report made by him to congress 
was the expedient of making the notes of the United States a 
legal tender suggested. He urged the issue of notes payable 
on demand in coin or received as coin in payment of duties. 
When the state banks had suspended specie payments, he 
recommended the issue of United States notes receivable for 
all loans to the United States and aU government dues except 
duties on imports. In this report of December, 1862, he said 
that ^^ United States notes receivable for bonds bearing a 
secure specie interest are next best to notes convertible into 
coin," and after stating the financial measures which in his 
judgment were advisable, he added: "The secretary recom- 
mends, therefore, no mere paper money scheme, but on the 
contrary a series of measures looking to a safe and gradual 
return to gold and silver as the only permanent basis, stand- 
ard, and measure of value recognized by the constitution." 
At the session of congress before this report was made, the 
bill containing the legal tender clause had become a law. He 
was extremely and avowedly averse to this clause, but was 
very solicitous for the passage of the bill to authorize the issue 
of United States notes then pending. He thought it indis- 
pensably necessary that the authority to issue these notes 
should be granted by congress. The passage of the bill was 
delayed, if not jeoparded, by the difference of opinion which 
prevailed on the question of making them a legal tender. It 
was under these circumstances that he expressed the opinion, 
when called upon by the committee of ways and means, that 
it was necessary; and he was not sorry to find it sustained by 
the decisions of respected courts, not unanimous indeed, nor 
without contrary decisions of state courts equally respectable. 
Examination and reflection un( more propitious circum- 
stances have satisfied him t "kT) 3n was erroneous, and 



864 HOHOFOUBB AHD THE FBOFLX. | 

he does not hesitate to declare it He wonld do ao pat •§ 
unhesitatingly if his favor to the legal tender daiue had been 
at that time decided, and his opinion as to the oonstitati0nality 
of tbe measure dear. 

Was the making of the notes a legal tender neoessaiy to the 
earrying on the war! In other words, was it neoessaiy to tbe 
execution of the power to borrow money! It is not the qnes- 
tSon whether the issue of notes was necessary, nor wh^her 
any of the financial measures of the government were neees- 
tfuy. The issuing of the circulation commonly known as 
greenbacks was necessary, and was constitntionaL They were 
necessary to the payment of the army and the navy and to 
all the puiposes for which the government uses money* Tb» 
banks had suspended specie payment, and the govemment 
was reduced to tbe alternative of using their paper or issiiing 
its own. 

^ Now it is a common error, and in our judgment it was die 
error of the opinion of the minority in H^pbwn^ v. Oriswoldf 
and is the error of the opinion just read, that considerations 
pertinent to the issue of United States notes have been mged 
in justification of making them a legal tender. The real 
question is, Was the making them a legal tender a necessary 
means to the executioD of the power to borrow money? If the 
notes would circulate as well without as with this quality it is 
idle to urge the plea of such necessity. But the circulation 
of the notes was amply provided for by making them receiv- 
able for all national taxes, all dues to the government, and all 
loans. This was the provision relied upon for the purpose by 
the secretary when the bill was first prepared, and his reflec- 
tions since have convinced him that it was sufiJcient Nobody 
could pay a tax, or any debt, or buy a bond without using 
these notes. As the notes, not being immediately redeemable, 
would undoubtedly be cheaper than coin, they would be pre- 
ferred by debtors and purchasers. They would thus, by the 
universal law of trade, pass into general circulation. As long 
as they were maintained by the government at or near par 
value of specie they would be accepted in payment of all dues, 
private as well as public. Debtors, as a general rule, would 



▲FFEMDIZ. 365 

pay in nothing else unless compelled by suit, and creditors 
would accept them as long as they would lose less by accept- 
ance than by suit. In new transactions, sellers would demand 
and purchasers would pay the premium for specie in the 
prices of commodities. The diflTerence to them, in the cur- 
rency, whether of coin or of paper, would be in the fluctua- 
tions to which the latter is subject. So long as notes should 
not sink so low as to induce cr^itors to refuse to receive them 
because they could not be said to be in any just sense pay- 
ments of debts due, a provision for making them a legal tender 
would be without effect except to discredit the currency to 
which it was applied. The real support of note circulation 
not convertible on demand into coin, is receivability for debts 
due the government, including specie loans, and limitation of 
amount. If the amount is smaller than is needed for tlie 
transactions of the country, and the law allows the use in these 
transactions of but one description of currency, the demand 
for that description will prevent its depreciation. But history 
shows no instance of paper issues so restricted. An approxi- 
mation in limitation is all that is possible, and this was 
attempted when the issues of United States notes were restricted 
to one hundred and fifty millions. But this limit was soon 
extended to four hundred and fifty millions, and even this was 
soon practically removed by the provision for the issue of notes 
by the national banking associations without any provision for 
corresponding reduction in the circulation of United States 
notes; and still further by the laws authorizing the issue of 
interest-bearing securities, made a tender for their amount, 
excluding interest. 

The best support for note circulation is not limitation, but 
receivability, especially for loans bearing coin interest. This 
support was given until the fall of 1864, when a loan bearing 
increased currency interest, payable in three years and con- 
vertible into a loan bearing less coin interest, was substituted 
for the six per cent, and five per cent, loans bearing specie 
interest, for which the notes had been previously received. 

It is plain that a currency so supported cannot depreciate 
more than the loans; in other words, below t credit 



866 MONOFOLIBB AJXD THS FBOFUL 

of the cotmtry. It will rise or &I1 with it At tiie p r c e ont 
moment, if the notes were reeeived for jBive per oeat. bondiy 
they wonld be at par. In other words, specie payme&ta would 
be tesmned. 

Now, does making the notes a l^al tender increase their 
valnet It is said that it does, by giving them a new nse. 
Hie best political economists say that it does not When^fhe 
government compels the people to receive its notes, it virtually 
declares that it does not expect them to be received without 
oompnlsion. It practically represents itself insolvent Hui 
certainly does not improve the value of its notes. It is aa 
element of depreciation. In addition, it creates a powerM 
interest in the debtor dass and in the purchasers of bonds to 
depress to the lowest point the credit of the notes. Hie 
cheaper these become, the easier the payment of debts, and 
ihe more profitable the investments in bonds bearing ooin 
interest 

On the other hand, the higher prices become, for everything 
the government needs to bny, and the greater the accumula- 
tion of public as well as private debt. It is true that snob a 
state of things is acceptable to debtors, investors in bonds, and 
speculators. It is their opportunity of relief or wealth. And 
many are persuaded by their representations that the forced 
circulation is not only a necessity but a benefit But the 
apparent benefit is a delusion and the necessity imaginaiy. 
In their legitimate use, the notes are hurt not helped by being 
made a legal tender. The legal tender quality is only valu- 
able for tlie purposes of dishonesty. Every honest purpose is 
answered as well and better without it. 

We have no hesitation, therefore, in declaring our conviction 
that the making of these notes a legal tender was not a neces- 
sary or proper means to the carr}nng on of war or to the exer- 
cise of any express power of the government. 

But the absence of necessity is not our only, or our weight- 
iest objection to this legal tender clause. We still think, not- 
withstanding the argument adduced to the contrary, that it 
does violate an express provision of the constitution, and the 
spirit, if not the letter, of the whole instrument. It cannot be 



AFFENDCE. 367 

maintained that legislation justly obnoxions to such objectionB 
can be maintained as the exercise of an implied power. There 
can be no implication against the constitution. L^slation 
to be warranted as the exercise of implied powers must not be 
" prohibited, but consistent with the letter and spirit of the 
constitution." 

Tlie fifth amendment provides that no person shall be 
deprived of life, liberty, or property without compensation 
or due process of law. The opinion of the former minority 
says that the argument against the validity of the legal tender 
clause, founded on this constitutional provision, is " too vague 
for their perception." It says that a "declaration of war 
would be thus unconstitutional," because it might depreciate 
the value of property; and " the abolition of tariff on sugar, or 
iron," because it might destroy the capital employed in those 
manufactures; and "the successive issues of government 
bonds," because they might make those already in private 
hands less valuable. But it seems to have escaped the atten- 
tion of the then minority that to declare war, to levy and 
repeal taxes, and to borrow money, are all express powers, and 
that the then majority were opposing the prohibition of the 
constitution to the claim of an implied power. Besides, what 
resemblance is there between the effect of the exercise of these 
express powers and the operation of the legal tender clause 
upon preexisting debts? The former are indirect effects of 
the exercise of undisputed powers. The latter acts directly 
upon the relations of debtor and creditor. It violates that 
fundamental principle of all just legislation that the legisla- 
ture shall not take the property of A and give it to B. It 
says that B, who has purchased a farm of A for a certain price, 
may keep the farm without paying for it, if he will only 
tender certain notes which may bear some proportion to the 
price^ or be even worthless. It seems to us that this is a 
manifest violation of this clause of the constitution. 

We think also that it is inconsistent with the spirit of the 
constitution in that it impairs the obligation of contracts. In 
the opinion of the then minority it is frankly said: "Undoubt- 
edly it is a law impairing the obligation of contracts made 



St8 XOKOFOUBB AHD 1!HR PTOFUL 

before its pasBage," but it is immecfoiay added: ^IPkfleflM 
eonstitation forbids the states to pass siidi k>VB^ it4am not 
ftibid congress," and this opinion, as wdl as the ofSaaioin jest 
lead, refers to tiie ejcpress anthoritj to estaUidt m waibrm 
qf^tem of bankraptcy as a proof that it was not the liitentioii 
c^ the oonstitation to withhold that power. It &i trtfs Unt 
tiie constitntion grants authority to pass a baakro]^ laHy but 
mar ii^erenoe is, that in this way only can oongresa 
tibe obligation of contracts. It may provide for 
Ae inability of debtors to perform their oontiiiet% and, ' 
the surrender of all their property may provide for their dis- 
diarge. Bat this is a very different thing firom pg ot t tog 
that they may satisfy contracts without payment^ withe«t 
pietence of inability, and without any judicial proceedings 

Tbst congress possesses the genmJ power to impair Ae 
obligation of contracts is a proposition which, to nie tiie 
langtiage of Chief Justice Marshall, ^must find its viadiea* 
tion in a train of reasoning not often heard in ecrarta of 
justice." ^^ It may well be added,^' said the same groat jiid||C^ 
^whether the naturo of society and of government dote not 
prescribe some limits tx) legislative power; and, if any be 
prescribed, where they are to be found, if the property of an 
individual, fairly and honestly acquired, can be seized without 
compensation? To the legislature all legislative power is 
granted, but the question whether the act of transferring the 
property of an individual to the public is in the naturo of a 
fegislative power is well worthy of serious reflection." 

And if the property of an individual cannot be transferred 
fco the public, how much less to another individual? 

These remarks of Chief Justice Marshall were made in a 
case in which it became necessary to determine whether a 
certain act of the legislature of Georgia was within the consti- 
tutional prohibition against impairing the obligation of con- 
tracts. And they assert fundamental principles of society and 
government in which that prohibition had its origin. They 
apply with great force to the construction of the constitution 
of the United States. In like manner and spirit Mr. Justice 
Chase had previously declared that ^' an act of the legislaturo 




APPENDIX. 369 

contrary to the great first principles of the social compact 
cannot be considered a rightful exercise of legislative anthor- 
ity." Among such acts he instances " a law that destroys or 
impairs the lawful private contracts of citizens." Can we be 
mistaken in saying that such a law is contrary to the spirit 
of a constitution ordained to establish justice? Can we be 
mistaken in thinking that if Marshall and Story were here to 
pronounce judgment in this case they would declare the legal 
tender clause now in question to be prohibited by and incon- 
sistent with the letter and spirit of the constitution? 

It is unnecessary to say that we reject wholly the doctrine, 
advanced for the first time, we believe in this court, by the 
present majority, that the legislature has any " powers under 
the constitution which grow out of the aggregate of powers 
conferred upon the government, or out of the sovereignty 
instituted by it." If this proposition be admitted, and it be 
also admitted that the legislature is the sole judge of the 
necessity for the exercise of such powers, the government 
becomes prfi.^>tically absiJute and unlimited. 

Our obsf rvati(»n8 thus far have been directed to the question 
of the constitutionality of the legal tender clause and its ope- 
ration upon contracts made before the passage of the law. 
We shall now consider whether it be constitutional in its appli- 
cation to contracts made after its passage. In other words, 
whether congress has power to make anything but coin a legal 
tender. 

And here it is well enough again to say that we do not ques- 
tion the authority to issue notes or to fit them for a circulating 
medium, or to promote their circulation by providing for their 
receipt in payment of debts to the government, and for 
redemption either in coin or in bonds; in short to adapt them 
to use as currency Nor do we question the lawfulness of 
contracts stipulating for payment in such notes, or the pro- 
priety of enforcing the performance of such contracts by 
holding the tender of such currency, according to their terms, 
sufficient. The question is, has congress power to ^ake the 
notes of the government, redeemable or irredeemable, a legal 
tender without contract and against the will of the person to 
24 



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libit* All rniMi«iirL*f=, wb^ii<!r iif cst^it^fir vankt^er^ 
llllllt lia%'e rtrrtjiin ptoportlons of tiiat mhkh Iherare fiiffln4ri 
lO niii'fiiiiirt^ The unit of extent moM Iia^y certani '^t^miH 
iMgth, thv unit of weight oert&iii definite gr&i^tj. aad tt» 
ttnit nT %'aluo (>(?rtain detitiite Tsliie. Tbe&e units, mnttiplkd 
or itiliilivifliMl, supply the itsnd^nk br whicb all inetsiLres aft 
pirofx^ V \y n I iiik\ The 4ic] i^ ^tk>n , therefore^ by the oummoo cxm&taX. 
of ill utttlonMi of ^Ad and silver as a standat^l of ralite wmt 
MtomU **i\ ti um* f'orrectly spewing, ineri table. For miiaterar 
49flluUt>iiR of vnlufi political ecotiomidte maj hare given, thef 
iU ign't^ f1i«tt IT^I^I ^^^^ silver hare moreralne in proportiDQ ta 
Wtt|rhf iinti ni/^MiTuI art' \t}m etihjeet ti» loss hy wear or abnumi 
Dim 411 y othiT Uniterm] capable of ea^y f^nbdivigian and 
imp^t^i'wi^^t*^ ivt»<l that tbcir value ehatigt?^ lesti and bj slower 
Atgl'w^i Thmn^h oounidornble t>t»nfHli* of time, tljan that of any 
K^^wr $\\Ht^tii^ which conld be nsed for the same pmpoM. 
A\\\\ \\\mP M^ qualities indispensable to the oonvenioit ocie of 
^w utatuiani nH)iiired. In tlie construction of the oonstitii- 
Mi^ml ^mnt t^f |>ower to establish a standard of valne, evmf 
p^mHmf>^^m h, therefore, against that which would authoruge 
\\\t^ adopitt^v of any other materials than those sanctioned bj 

Hwt \\\p \Pfn\^ of tlie only express grant in the oonstitntion 
\)f jv^^V^^r h\ ^wtablli^h «uoh a standard leave little room forplB- 
<iU)^\p(iouii. T\w j>owt*r conferred is the power to coin money, 
m\\ \\\Pff^ \\x\T%U \n\\M be understood as they were used at the 
\H\\\t>^ \\\p <^\M\\U\\\\m wa« adopted. And we have been referred 
It) no a\if J^orit^v which at that time defined coining otherwise 
than a» minting or stamping metals for money; or money 
ol^t^rwiiti' than a* metal coined for the purposes of commerce. 
Thene aix^ xh^ w\>i>i« of %)ohn8on, whoee great dictionary 
oontains no nAiWe^oe to money of papa*. 

It i« true that nobis iasuad by banJcs^ botii in England and 




APPENDED. 871 

America, were then in circulation, and were nsed in exchanges, 
and in common speech called money, and that bills of credit, 
issued both by congress and by the states, had been recently 
in circulation under the same general name; but these notes 
and bills were nev^er regarded as real money, but were always 
treated as its representatives only, and were described as cur- 
rency. The legal tender notes themselves do not purport to 
be anything else than promises to pay money. They have 
been held to be securities, and therefore exempt from state 
taxation ; and the idea that it was ever designed to make such 
notes a standard of value by the framers of the constitution is 
wholly new. It seems to us impossible that it could have been 
entertained. Its assertion seems to us to ascribe folly to the 
framers of our fundamental law, and to contradict tie most 
conspicuous facts in our public history. 

The power to coin money was a power to determine the 
fineness, weight, and denominations of the metallic pieces by 
which values were to be measured; and we do not perceive how 
this meaning can be extended without doing violence to the 
very words uf the constitution by imposing on them a sense 
they were never intended to bear. This construction is sup- 
ported by contemporaneous and all subsequent action of the 
legislature ; by all the recorded utterances of statesmen and 
jurists, and the unbroken tenor of judicial opinion until a very 
recent period, when the excitement of the civil war led to the 
adoption, by many, of different views. 

The sense of the convention which framed the constitution 
is clear, from the account given by Mr. Madison of what took 
place when the power to emit bills of credit was stricken from 
the reported draft. He says distinctly that he acquiesced in 
the motion to strike out, because the government would not 
be disabled thereby from the use of public notes, so far as they 
would be safe and proper, while it cut off the pretext for a 
paper currency, and particularly for making the bills a tender 
either for public or private debts. The whole discussion upon 
bills of credit proves, beyond all possible question, that the 
convention regarded the power to make notes a legal tender as 
absolntely excluded from the constitution. 



m 



HOKOPoijmi Aim thk fkop 



The papers of the Federalist, widelj circnlstjetd. In fiiTor of 
the ratificatian of the c*mstitut]on, diseus^ft brif^Hv the powier to 
€oin monej, as a j^tiwer to fabricate metallic' Tnoney, without a 
^hint that aoy power Ui fabricate money nf any nflier descrip- 
tion was given to congress ; and the views which it pro- 
^noinlgated maybe fairlj regarded a£ the views of those who 
▼oted Tor adoption. 

Acting upon the same views, congress t^cwk measures for the 
establislmient of a mintj exercieing thereby the power to c**>in 
money, and has continued to exerciBe the same power, in the 
same way, until the present day* It established the dollai s£ 
the money unit, determined the quantity and quality of gold 
and silver of which each coin should eoneist, and pre&eribed 
the denominations and forms of all coins to he issued, (Tntil 
lecentiiy no one in congress ever suggest-etl that that hoij 
possessed power to make anything else a standard of valne. 

Statesmen who have disagreed widely on other pointa hav* 
agreed in the opinion that the only cunstitntional m^^ire» of 
valae are metallic coins, struck as regukted by the aiitltority 
of congress. Mr. Webster expressed not only his opinion bnt 
the universal and sptfjpd ooT^vicHnn of the country wln^n he 
said: ^^ Most unquestionably there is no legal tender, and 
there can be no legal tender in this country, under the author- 
ity of this government or any other, but gold and silver, either 
the coinage of our mints or foreign coin at rates r^ulated by 
congress. This is a constitutional principle, perfectly plain 
and of the very highest importance. The states are prohibited 
from making anything but gold and silver a tender in pay- 
ment of debts, and although no such express prohibition is 
applied to congress, yet as congress has no pmoer granted to it 
in this respect but to coin money and regidate the vahie of 
foreign coin, it clearly has no power to substitute paper or 
anything else for coin as a tender in payment of debts and in 
discharge of contracts." 

And this court, in Owin v.. Breedlove, said : " By the con- 
gtU/ation of the United States gold and silver coin made 
current by law can only be tendered in payment of debts." 
And in The Un/ited States v. Marigold, this court speaking of 



APPENDIX- 873 

the trnst and duty of maintaining a uniform and pure metallic 
standard of uniform value throughout the Union, said: "The 
power of coining money and regulating its value was delegated 
to congress by ths constitution /or the very piir pose ^ as assigned 
by the framers of that instrument, of creating and preserving 
the uniforndty and purity of such a standard of vahie?'* 

The present majority of the court say that legal tender notes 
"have become the universal measure of values," and they hold 
that the legislation of congress, substituting such measures for 
coin by making the notes a legal tender in payment, is war- 
ranted by the constitution. 

But if the plain sense of words, if the contemporaneous 
exposition of parties, if common consent in understanding, if 
the opinions of courts avail anything in determining the mean- 
ing of the constitution, it seems impossible to doubt that the 
power to coin money is a power to establish a uniform standard 
of value, and that no other power to establish such a standard, 
by making notes a legal tender, is conferred upon congress by 
the constitution. 

My brothers Clifford and Field concur in these views, but 
in consideration of the importance of the principles involved 
will deliver their separate opinions. My brother Nelson also 
dissents. 



.i.^> 



kmrn^^: ,=*'ii3»* 



OHAPTEB III. 

UttHBNTlMO OmiOH OF JXJBSUM 

MONEY, in the oonstitntional Benae^ means ooiiis of gold 
and diver fiibrioated and stamped by aafiuni^ oif kw, 
as a measure of valne, pursuant to the powervested in wagnm • 
bj the constitution. 

Coins of copper may also be minted for small fracil&MDal eir- 
eolation, as authorized by law and tihe usage of the govenuoMBt 
fer eighty years, but it is notneeessary to diseoss that topie al 
large in this investigation. 

Even the authority of congress upon the general sublet does 
not extend beyond the power to coin money, regnlate die vdne 
thereof and of foreign coin. 

Express power is also conferred upon congress to ftx die 
standard of weights and measures, and of course thirt staiiAitd, 
as applied to future transactions, may be varied or ehailgdl to 
promote the public interest, but the grant of power in reipeel' 
to the standard of value is expressed in more guarded Ian- 
guage, and the grant is much more restricted. 

Power to fix the standard of weights and measures is evi- 
dently a power of comparatively wide discretion, but the power 
to regulate the value of the money authorized by the constitu- 
tion to be coined is a definite and precise grant of power, 
admitting of very little discretion in its exercise, and is not 
equivalent, except to a very limited extent, to the power to 
fix the standard of weights and measures, as the money 
authorized by that clause of the constitution is coined money, 
and, as a necessary consequence, must be money of actual 
value, fabricated from the precious metals generally used 
for that purpose at the period when the constitution was 
framed. 

Coined money, such as is authorized by that clause of the 
instrument, consists only of the coins of the United StateS| 



APPENDIX. 375 

fiibricated and stamped by authority of law, aud is the same 
money as that described in the next clause of the same section 
as the current coins of the United States, and is the same 
money also as " the gold and silver coins " described in the 
tenth section of the same article which prohibits the states 
from coining money, emitting bills of credit, or making 
*' anything but gold and silver coin a tender in payment 
of debts." 

Intrinsic value exists in gold and silver, as well before as 
after it is fabricated and stamped as coin, which shows conclu- 
sively that the principal discretion vested in congress under 
that clause of the constitution consists in the power to deter- 
mine the denomination, fineness, or value and description of 
the coins tt) be struck, and the relative proportion of gold or 
silver, whether standard or pure, and the proportion of alloy 
to be used in minting the coins, and to prescribe the mode in 
which the intended objer.'t of the grant shall be accomplished 
and carried into practical effect. 

Discretion, to some extent, in prescribing the value of the 
coins minted is beyond doubt vested in congress; but the plain 
intent of the constitution is that congress, in determining that 
matter, shall be governed chiefly by the weight and intrinsic 
value of the coins, as it is clear that if the stamped value of 
the same should much exceed the real value of gold and silver 
not coined, the minted coins would immediately cease to be 
either current coins or a standard of value, as contemplated by 
tlie constitution. Commercial transactions imperiously require 
a standard of value; and the commercial world, at a very early 
period in civilization, adopted gold and silver as the true stand- 
ard for that purpose, and the standard originally adopted has 
ever since continued to be so regarded by universal consent to 
the present time. 

Paper emissions have, at one time or another, been author- 
ized and employed as currency by most commercial nations, 
and by no government, past or present, more extensively than 
by the United SUftes; and yet it is safe to affirm that all expe- 
rience in its use as a circulating medium has demonstrated the 
proposi*^^''^'^ **»*^t it cannot by any legislation, however stringent, 



376 MONOPOLIES AND THE PEOPLE. 

be made a standard of valne or the just equivalent of gold and 
silver. Attempts of the kind have always failed, and no body 
of men, whether in public or private stations, ever had more 
instructive teachings of the truth of that remark than the 
patriotic men who fi*a:.ie4 the federal constitution, as they 
had seen the power to emit bills of credit freely exercised 
during the war of the Revolution, not only by the oonfed^ii- 
tion, but also by the states, and knew from bitter experience 
its calamitous effects and the utter worthlessness of such a 
circulating medium as a standard of value. Such men, bo 
instructed, could not have done otherwise than they did do, 
which was to provide an irrepealable standard of value, to be 
coined from gold and silver, leaving as little upon the subject 
to the discretion of congress as was consistent with a wige 
forecast and an invincible determination that the essential 
principles of the constitution should be perpetual as the 
means to secure the blessings of liberty to themselves and 
their posterity. 

Associated as the grant to coin money and regulate the value 
thereof is with the grant to fix the standard of weights and 
measures, the conclusion, when that fact is properly weighed 
in connection with the words of the grant, is irresistible that 
the purpose of the framers of the constitution was to provide 
a permanent standard of value, which should, at all times and 
under all circumstances, consist of coin fabricated and stamped, 
from gold and silver, bv authority of law, and that they 
intended at the same time to withhold from congress, as well 
as from the states, the power to substitute any other money as 
a standard of value in matters of finance, business, trade or 
commerce. 

Support to that view may also be drawn from the last words 
of the clause giving congress the unrestricted j)ower to regulate 
the value of foreign coin, as it would be difficult, if not impos- 
sible, to give full effect to the standard of value prescribed bv 
the constitution, in times of fluctuation, if the circulating 
medium could be supplied by foreign coins not subject to any 
congressional regulation as to their value. 

Exclusive power to regulate the alloy and value of the coin 



APPENDIX. 377 

struck by their own authority, or by the authority of the states, 
was vested in congress under the confederation, but the con- 
gress was prohibited from enacting any regulation as to the 
value of the coins unless nine states assented to the proposed 
regulation. 

Subject to the power of congress to pass such regulations it 
is unquestionably true that the states, under the confederation 
as well as the United States, possessed the power to coin 
money, but the constitution, when it was adopted, denied to 
the states all authority upon the subject, and also ordained 
that they should not make anything but gold and silver coin 
a tender in payment of debts. 

Beyond all doubt the framers of the constitution intended 
that the money unit of the United States, for measuring 
values, should be one dollar, as the word dollar in the plund 
form is employed in the body of the constitution, and also in 
the seventh amendment, recommended by congress at its first 
session after the constitution was adopted. Two years before 
that, to-wit: July 6, 1785, the congress of the confederation 
enacted that the money unit of the United States should " be 
one dollar," and one year later, to-wit: August 8, 1786, they 
established the standard for gold and silver, and also provided 
that the money of account of the United States should corres- 
j)ond with the coins established by law. 

On the 4th of March, 1789, congress first assembled under 
the constitution, and proceeded without unnecessary delay to 
enact such laws as were necessary to put the government in 
operation which the constitution had ordained and estab- 
lished. Ordinances had been passed during the confederation 
to organize the executive departments, and for the establish- 
ment of a mint, but the new constitution did not perpetuata 
any of those laws, and yet congress continued to legislate for 
a period of three years before any new law was passed pre- 
scribing the money imit or the money of account, either for 
"the public offices" or for the courts. Throughout that 
period it must have been understood that those matters were 
impliedly regulated by tlie constitution, as tari£b were enacted, 
tonna^ 'inHes imposed, laws passed for the collection of 



378 honofolus and the fboplb. 

duties, the several executive departments created, mnd the 
judiciary of the United States organized and empowered to 
exercise full jurisdiction under the constitution. 

Duties of tonnage and import duties were required, by the 
act of the Slst of July, 1789, to be paid " in g6ld and silver 
coin," and congress, in the same act, adopted comprehensive 
regulations as to the value of foreign coin, but no provision 
was made for coining money or for a standard of value, except 
so far as that subject is involved in the regulation as to the 
value of foreign coin, or for a money unit, nor was any regn- 
lation prescribed as to the money of account. Eevenue for 
the support of the government, under those regulations, was 
to be derived solely from duties of tonnage and import duties, 
and the express provision was that those duties should be col- 
lected in gold and silver coin. 

Legislation under the constitution had proceeded thus far 
before the treasury department was created. Treasury regu- 
lations for the collection, safe-keeping, and disbursement oi' 
the public moneys became indispensable, and congress, on the 
2d September, 1789, passed the act to establish the treasury 
department, which has ever since remained in force. By that 
act, the secretary of the treasury is declared to be the head of 
the department, and it is made his duty, among other things, 
to digest and prepare plans for the improvement and manage- 
ment of the public finances and for the support of the public 
credit; to prepare and report estimates of the public revenue 
and of the public expenditures; to superintend the collection 
of the revenue; to prescribe forms of keeping and stating 
accounts and for making returns; to grant all warrants for 
moneys to be issued from the treasury, in pursuance of appro- 
priations by law, and to perform all such services relative to 
the finances as he shall be directed to perform. 

Moneys collected from duties of tonnage and from import 
duties constituted at that period the entire resources of the 
national treasury, and the antecedent act of congress, providing 
for the collection of those duties, imperatively required that 
all such duties should be paid in gold and silver coin, from 
which it follows that the moneys mentioned in the act creating 



APPENDIX. 379 

the treasury department were moneys of gold and silver coin 
which were collected as public revenue from the duties of ton- 
nage and import duties imposed by the before-mentioned prior 
acts of congress. Appropriations made by congress were un- 
derstood as appropriations of moneys in the treasury, and all 
warrants issued by the secretary of the treasury were under- 
stood to be warrants for the payment of gold and silver coin. 
Forms for keeping and stating accounts, and for making 
returns, and for warrants for moneys to be issued from the 
treasury were prescribed, and in all those forms the secretary 
of the treasury adopted the money unit recognized in the con- 
stitution, and which had been ordained four yeai'S before by 
the congress of the confederation. 

Argument to show that the national treasury was organized 
on the basis that the gold and silver coins of the United States 
were to be the standard of value is unnecessary, as it is a his- 
torical fact which no man or body of men can ever successfrilly 
contradict. Public attention had been directed to the neces- 
sity of establishing a mint for the coinage of gold and silver, 
several years before the convention met to frame the constitu- 
tion, and a committee was appointed by the congress of the 
confederation to consider and report upon the subject They 
reported on the 2l6t February, 1782, more than a year before 
the treaty of peace, in favor of creating such an establishment, 
and on the 16th of October, 1786, the congress adopted an 
ordinance providing that a mint should be established for the 
coingage of gold, silver, and copper, agreeable to the resolves 
of congress previously mentioned, which prescribed the stand- 
ard of gold and silver, and recognized the money unit estab- 
lished by the resolves passed in the preceding year. 

Congressional legislation organizing the new government 
had now progressed to the point where it became necessary to 
re-examine that subject and to make provision for the exercise 
of the power to coin money, as authorized by the constitution. 
Pursuant to that power, congress, on April 2d, 1792, passed 
the act establishing a mint for the purpose of a national coin- 
age, and made provisions, among other things, that coins of 
gold and silver, of certain fineness and weight, and of certain 



880 XQNOPOUBB AHD THX FBQVUL 

denominatioiiB, valne, and deemptions, ahoidd be ftom tuna to 
time strnck and coined at the same mint Spedfie proviaioii 
J8 there made for coining gold and silver ooina, as foBaws: 
Ffrsty gold coins, to- wit: Ea^es of the yalne of ten doDan or 
units; half-eagles of the value t>f five doUan; qnarler-eag^ 
of the valne of two and a half dollars, the act specifying in 
each ctaBe the number of grains and fractions of a grain die 
coin shall contain, whether fitbricated from pure or standard 
gold. Second, silver coins, to-wit: ^ Dollabs ob innni^^ eadi 
to contain 871 grains and ^ths parts of a grain of pore aOv^, 
or 416 grains of stiftndard silver. like provision is abo made 
ibr the coinage of half-dollars, quarter-dollars, dimes, and half- 
dimes, and also for the coinage of certain copper ooins^ bat it 
is not necessary to enter much into those details in this case. 

Ph>vision, it must be conceded, is not there made, in eaqness 
terms, that the money unit of the United States shall be one 
dollar, as in the ordinance passed during the confederation, bat 
the act under consideration assumes throughout that the coin 
called dollar is the coin employed for that pnrpoae, as is 
obvious from the fkct that the words dollars and units are 
treated as synonomous, and that all the gold coins previously 
described in the same section are measured by that word as 
the acknowledged money unit of the constitution. Very 
strong doubts are entertained whether an act of congress is 
absolutely necessary to constitute the gold and silver coins of 
the United States, fabricated and stamped as such by the 
proper executive officers of the mint, a legal tender in pay- 
ment of debts. Constituted, as snch coins are, by the consti- 
tution, the standard of value, the better opinion would seem 
to be that they become legal tender for that purpose, if minted 
of the required weight and fineness, as soon as they are coined 
and put in circulation by lawful authority, but it is tiuuoccs- 
sary to decide that question in this case, as the congress, by 
the sixteenth section of the act establishing a mmt, provided 
that all the gold and silver coins which shall have been struck 
at, and issued from, the said mint shall be a lawful tender in 
all payments whatsoever — those of foil weight " according to 
the respective values herein declared, and those of less than 



APPENDIX. 881 

fall weight at values proportioned to their respective weights." 
Such a regulation is at all events highly expedient, as all expe- 
rience shows that even gold and silver coins are liable to be 
diminished in weight by wear and abrasion, even if it is not 
absolutely necessary in order to constitute the coins, if of fall 
weight, a legal tender. 

Enough has already been remarked to show that the money 
unit of the United States is the coined dollar, described in the 
act establishing the mint, but if more be wanted it will be 
found in the twentieth section of that act which provides that 
the money of account of the United States shall be expressed 
in dollars or units, dimes or tenths, etc., and that all accounts 
in the public offices, and all proceedings in the fedei*al courts, 
shall be kept and had in conformity to tliat regulation. 

Completed, as the circle of measures adopted by congress 
were, to put the new government into successful operation, by 
the passage of that act, it will be instructive to take a brief 
review of the important events which occurred within the 
period of ten years next preceding its passage, or of the ten 
years next following the time when that measure was first 
proposed in the congress of the confederation. Two reasons 
suggest the 21st of February, 1782, as the time to commence 
the review, in addition to the fact that it was on that day that 
the cohimittee of congress made their report approving of the 
project to establish a national mint. They are as follows: (1) 
Because that date just precedes the close of the war of the 
Revolution; and (2) because the date at the same time extends 
back to a period when all America had come to the conclusion 
that all the paper currency in circulation was utterly worthless, 
and that nothing was fit for a standard of value but gold and 
silver coin, fabricated and stamped by the national authority. 
Discussion upon the subject was continued, and the ordinance 
was passed; but the measure was not put in operation, as the 
convention met the next year, and the constitution was framed, 
adopted, and ratified, the president and the members of con- 
gress were elected, laws were passed, the judicial system was 
organized, the executive departments were created, the revenue 
system established, and provision was made to execute the 



382 MONOl'OLIES AND THE PEOFT.E. 

power vested in congress to coin money and provide a standard 
of value, as ordained by the constitution. 

Perfect consistency characterizes the measures of that entire 
period in respect to the matter in question, and it would be 
strange if it had been otherwise*, as the whole series of meas- 
ures were to a very large extent the doings of the same dass 
of men, whether the remark is applied to the old congress, or 
the convention which framed the constitution, or to the first 
and second sessions of the new congress which passed the laws 
referred to, and put the n^w system of government under the 
constitution into full operation. Wise and complete as those 
laws were, still some difficulties arose, as the several states had 
not adopted the money unit of the United States, nor the 
money of account prescribed by the twentieth section of the 
act establishing the mint. Such embarrassments, however, 
were chiefly felt in the federal courts, and they were not of 
long continuance, as the several states, one after another, in 
pretty rapid succession, adopted the new system established by 
congress, both as to the money unit and the money of account 
Virginia, December 19th, 1792, reenacted that section in the 
act of congress without any material alteration, and New 
Ilampshire, on the 20th of Febniary, 1794, passed a similar 
law. Massacluisetts adopted the same provision the next year, 
and 80 did Rhode Island and South Carolina. Georgia con- 
curred on the 22d of Febniary, 1796, and New York on the 
27th of January, 1797, and all the other states adopted the 
same regulation in the course of a tew yoai-s. State concur- 
rence was essential in those particulars to the pioper working 
of the new system, and it was cheerfully accorded by the state 
legislatures without unnecessary' delay. 

Congress established as the money unit the coin mentioned 
in the constitution, and the one which had been adopted as 
such seyen years before in the resolve passed by the congress 
of the confederation. Dollars, and decimals of dollars, were 
adoptefl as the money of account by universal consent, as mav 
l)e inferred from the unanimity exhibited by the states in fol- 
lowing the example of congress. Nothing remained for con- 
gress to do to perfect the new system but to execute the power 



APPENDIX. 383 

to coin money, and regulate the value thereof, as it is clear 
that the constitution makes no provision for a standard of 
value, unless the power to establish it is conferred by that 
grant. 

Power to fix the standard of weights and measures is vested 
in congress by the constitution in plain and unambiguous terms,, 
and it was never doubted — certainly not until within a recent 
period — that the power conferred to coin money, or to fabricate 
and stamp coins from gold and silver, which, in the constitu- 
tional sense is the same thing, together with the power to deter- 
mine the fineness, weight, and denomination of the moneys 
coined, was intended to accomplish the same purpose as to 
values. Indubitably it was so understood by congress in pre- 
, scribing the various regulations contained in the act establish- 
ing the national mint, and it continued to be so understood by 
all branches of the government — executive, legislative, and judi- 
cial — and by the whole people of the United States, for the 
period of seventy years from the passage of that act. 

New regulations became necessary, and were passed in the 
meantime, inci-easing slightly the proportion of alloy used in 
fabricating the gold coins, but if those enactments are care- 
fully examined, it will be found that no one of them contains 
anything inconsistent in principle with the views here expressed. 
Gold, at the time the act establishing the mint became a law, 
was valued fifteen to one as compared with silver, but the dis- 
parity in value gradually increased, and to such an extent that 
the gold coins began to disappear from circulation, and, to rem- 
edy that evil, congress found it necessary to augment the rela- 
tive proportion of alloy by diminishing the required amount 
of gold, whether pure or standard. Eagles coined under that 
act were required to contain each two hundred and thirty-two 
grains of pure gold, or two hundred and fifty-eight grains of 
standard. Tliree years later congress enacted that the standard 
for both gold and silver coins should thereafter be such that, 
of one thousand parts by weight, nine hundred should be of 
pure metal and one hundred of alloy, by which the gross weight 
of the dollar was reduced to four hundred and twelve and a 
hRlf uTTAins ""-T* 'ht> fineness of the coins was correspondingly 



884 HONOFOLIEB AND THE PROFLR. 

iDcreased, so that the money unit remained of the same intrinsic 
value as under the original act Apply that rule to the eagk, 
and it will be seen that its gross weight would be increasedi as 
it was in fact by that act, but it continued to contain, as under 
the preceding act, two hundred and thirty grains of pure gold 
and no more, showing conclusively that no change was made 
in the value of the coins. 

Double eagles and gold dollars were authorized to be " struck 
and coined " at the mint, by the act of March 3d, 1849, bnt the 
standard established for other gold coins was not changed, and 
the provision was that the new coins should also be legal tender 
for their coined value. 

Fractional silver coins were somewhat reduced in value by 
the act of Febniary 21st, 1853, but the same act provided to 
tlie eTTect that the silver coins issued in conformity thereto 
should not be a legal tender for any sum exceeding five dollars, 
showing that the puqwse of the enactment was to prevent the 
fractional coins, so essential for daily use, from being hoarded 
or othei*wise withdrawn from circiJation. 

Suppose it be conceded, however, that the effect of that act 
was slightly to debase the fractional silver coins struck and 
coined under it, still it is quite clear that the amount was too 
inconsiderable to furnish any solid argument against the propo- 
sition that the standard of value in the United States was fixed 
by the constitution, and that such was the understanding, both 
of the governnient, and of the people of the United States, 
for a period of more than seventy years from the time the con- 
stitutifm wa,s adopted and put in successful operation under the 
laws of congress. Throughout that period the value of the 
money unit was never diminished, and it remains to-day, in 
respect to value, what it was when it was defined in the act 
establishing the mint, and it is safe to affirm that no one of 
the changes made in the other coins, except, perhaps, the frac- 
tional silver coins, ever extended one whit beyond the appro- 
priate limit of constitutional regulation. 

Treasury notes, called United States notes, were authorized 
to be issued by the act of Februarys 25th, 1802, to the amount 
of $150,000,000, on the credit of the United States, but thev 



APPENDIX. 386 

were not to bear interest, and were to be made payable to bearer 
at the treasury. They were to be issned by the secretary of the 
treasury, and the further provision was that the notes so issued 
should be lawful money and legal tender in payment of all 
debts, public and private, within tlie United States, except 
duties on imports, and interest upon bonds and notes of the 
United States, which the act provides " shall be paid in coin." 
Subsequent acts passed for a similar purpose also except ^^ oe 
tificates of indebtedness and of deposit," but it will not bb 
necessary to refer specially to the other acts, as the history of 
that legislation i^ fully given in the prior decision of this court 
upon the same subject. 

Strictly examined it is doubtful whether either of the cases 
before the court present any such questions as those which 
have been discussed in the opinion of a majority of the court 
just read; but suppose they do, which is not admitted, it then 
becomes necessary to inquire in the first place whether those 
questions are not closed by the recorded decisions of this court. 
Two questions are examined in the opinion of a majority of 
the court: (1 ) Whether the legal tender acts are constitutional , 
as to contracts made before the acts were passed. (2) Whether 
they are valid if applied to contracts made since their passage. 

Assume tliat the views here expressed are correct, and it 
matters not whether the contract was made before or after the 
act of congress was passed, as it necessarily fdllows that con- 
gress cannot, under any circumstances, make paper promises 
of any kind a legal tender in payment of debts. Prior to the 
decision just pronounced, it is conceded that the second ques- 
tion presented in the record was never determined by this 
court, except as it is involved in the first question, but it is 
admitted by the majority of the court that the first question, 
that is the question whether the acts under consideration are 
constitutional as to contracts made before their passage, was 
fully presented in the case of Hepburn v. Griswold^ and that 
the court decided that an act of congress making mere paper 
promises to pay dollars a legal tender in payment of debts 
previously contracted is unconstitutional and void. 

Admitted or not, it is as clear as anythii in legal decision 



886 HONOFOLIBB AND THB FBOFLK. 

can be that the judgment of the court in that case controU die 
lirst question printed in the cases before the oonrty unkis it 
be held that the judgment in that case was given for the wrong 
party and that the opinion given by the chief justice ought to 
be overruled. 

Attempt is made to show that the second queation is an 
open one, but the two, in my judgment, involve the same con- 
siderations, as congress possesses no other power upon the 
subject than that which is derived from the grant to coin 
money, regulate the value thereof, and of foreign coin. By 
that remark it is not meant to deny the proposition that con- 
gress, in executing the express grants, may not pass all laws 
which shall be necessary and proper for carrying the same into 
execution, as provided in another clause of the same section 
of the constitution. Much consideration of that topic is not 
required, as the discussion was pretty nearly exhausted by the 
chief justice in the case of Hepburn v. Chnswold^ which arose 
under the same act, and in which he gave the opinion. In 
that case the contract bore date prior to the passage of the 
law, and he showed conclusively that it could never be neces- 
sary and proper within the meaning of the constitution, that 
congress, in executing an}' of tliese express powers, should 
pass laws to compel a creditor to accept paper promises as 
fulfilling a contract for the payment of money expressed in 
<lollar8. Obviously the decision was confined to the case 
before the court, but I am of the opinion that the same rule 
must be applied whether the contract was made before or 
aftt»r the passage of the law, as the contract for the payment 
of money, expressed in dollars, is a contract to make the pay- 
ment in such money as the constitution recognizes and estab- 
lishes as a standard of value. Money values can no more be 
measured without a standai-d of value than distances without 
a standard of extent, or quantities without a standard of 
weights or measures, and it is as necessary that there should 
be a money unit as that there should be a unit of extent, or 
of weight, or quantity. 

Credit currency, whether issued by the states or the United 
States, or by private corporations or individuals, is not recog- 



APPENDIX. 887 

nized by the constitntion as the standard of value, nor can it 
be made such by any law which congress or the states can pass, 
as the laws of trade are stronger than any legislative enact- 
ment. Commerce requires a standard of value, and all experi- 
ence warrants the prediction that commerce will have it, 
whether the United States agree or disagree, as the laws of 
commerce in that respect are stronger than the laws of any 
single nation of the commercial world. Values cannot be 
measured without a standard any more than time or duration, 
or length, surface, or solidity, or weight, gravity, or quantity. 
Something in every such case must be adopted as a unit which 
bears a known relation to that which is to be measured, as the 
dollar for values, the hour for time or duration, the foot of 
twelve inches for length, the yard for cloth measure, the square 
foot or yard for surface, the cubic foot for solidity, the gallon 
for liquids, and the pound for weights; the pound avoirdupois 
being used in most commercial transactions, and the pound 
troy " for weighing gold and silver, and precious stones, except 
diamonds." 

Unrestricted ])ower "to fix the standard of weights and 
measures," is vested in congress, but until recently congress 
had not enacted any general regulations in execution of that 
power. Regulations upon the subject existed in the states at 
the adoption of the constitution, the same as those which pre- 
vailed at that time in the parent country, and Judge Story 
says that the understanding was that those regulations 
remained in full forc«, and that the states, until congress 
should legislate, possessed the power to fix their own weights 
and measures. 

Power to coin money and regulate the value of domestic and 
foreign coin was vested in the national government to produce 
uniformity of value and to prfevent the embarrassments of a 
perpetually fluctuating and variable currency. 

Money, says the same commentator, is the universal medium 
or common standard by a comparison with which the value 
of all merchandise may be ascertained; and he also speaks of 
it as " a sign which represents the respective values of all other 
commodities." Such a p' ♦ ^^^ is the power to coin money, 






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APPENDIX. 

oH the 28d of June, in the succeeding year, the defendants 
sued out a writ of error, and removed the cause into this court 
for reexamination. Under the regular call of the docket the 
case was first argued at the December term, 1867, but at the 
suggestion of the attorney general an order was passed that it 
be re-argued, and the case was accordingly continued for that 
purpose. Able counsel appeared at the next term, and it was 
again elaborately argued on both sides. Four or five other 
cases were also on the calendar, supposed at that time to 
involve the same constitutional questions, and those cases were 
also argued, bringing to the aid of the court an unusual array 
of counsel of great learning and eminent^abilities. Investiga- 
tion and deliberation followed, authorities were examined, and 
oft-repeated consultations amon^ the justices ensued, and the 
case was held under advisement as long as necessary to the 
fullest examination by all the justices of the court, before the 
opinion of the court was delivered. By law, the supreme court 
at that time consisted of the chief justice and seven associate 
justices, the act of congress having provided that no vacancy 
in the office of associate justice should be filled until the 
number should be reduced to six. Five of the number, 
including the chief justice, concurred in the opinion in that 
case, and the judgment of the state court was affirmed, three 
of the associate justices dissenting. Since that time one of 
the justices who concurred in that opinion of the court has 
resigned, and congress having increased the number of associ- 
ate justices to eiglit, the two cases before the court have been 
argued, and the result is that the opinion delivered in the 
tbrtner case is overruled, five justices concurring in the present 
opinion and four dissenting. Five justices concurred in the 
first opinion, and five liave overruled it. Persuaded that the 
first opinion was right, for the reasons already assigned, it is 
not possible that I should concur in the second, even if it were 
true that no other reasons of any weight could be given in 
support of the judgment in the first case, and that the conclu- 
sion there reached must stand or fall without any other support. 
Many oAer reasons, however, may be invoked to fortiiy that 



m 



MONOFOuBa ^Mkfmt nanjL 



. Ji^ writers upon political eoonamy leprae tiwil inii i y iMto 
iKp)9^»«al standard of value^ and tihie mmnam n( ^mtmag^ 
ismga and domestic, aud that tlie^wer lo <«ib -t«ii f i galifa 
tiba !<nilae of money is an essential attribate df fiaiHoiiil iOfoiv 
^ifj^tf. Goods and chattels were directly barlerad cm te 
another when the division of labor was Urst intPddnee^ M 
gM and silver were adopted to serve the pnipoee oi ewhiagt 
bj the tacit ooncorrence of all nations at a veiy earljr period 
in the history of commensial transactions. CSomnaodtiies of 
various kinds were nsed as money at different pmoda m^lSfei' 
ent countries, but experience soon showed the ediDiBflnial 
nations that gold and silver embodied theqajdities deumbleii 
money in a much greater degree than any other known wm- 
modity or substance. Daily experience shows tbe tea& of tint 
proposition, and supersedes the necessity of any ramarlBB Is 
enforce it, as all adxnit that a commodity to serve aa aatendr 
ard of value and a medium of exchange must be easily divisi^ 
bte into small portions; that it must admit of being hapt fer 
an indefinite period without deteriorating; that it moat poasens 
great value in small bulk, and be capable of bbing easily trans- 
ported from place to place ; that a given denomination in 
money should always be equal in weight and quality, or line 
ness, to other pieces of money of the same denomination, and 
that its value should be the same, or as little subject to variation 
as possible. Such qualities, all agree, are united in a much 
greater degree in gold and silver than in any other known 
commodity, which was as well known to the members of the 
convention who framed tlie constitution as to any body of men 
since assembled and intrusted to any extent with the public 
affairs. They not only knew that the money of the commen> 
cial world was gold and silver, but they also knew, from bitter 
experience, that paper promises, whether issued by the states 
or the United States, were utterly worthless as a standard of 
value for any practical purpose. 

Evidence of the truth of these remarks, of the most con- 
vincing character, is to be found in the published proceedings 



AFFXHDIX. 891 

of that convention. Debate upon the 8abject first arose when 
an amendment was proposed to prohibit the states from emit- 
ting bills of credit or making anything but gold and silver coin 
a tender in payment of debts, and from the character of that 
debate, and the vote on the amendment, it became apparent that 
paper money had but few, if any, friends in the convention. 
Article seven of the draft of the constitution, as reported to 
the convention, contained the clause, ^^ and emit bills on the 
credit of the United States," appended to the grant of power 
vested in congress to borrow money, and it was on the motion 
to strike out that clause that the principal discussion in respect 
to paper money took place. Mr. Madison inquired if it would 
not be sufficient to prohibit the making such bills a tender, as 
that would remove the temptation to emit them with unjust 
views. Promissory notes, he said, in that shape — that is, when 
not a tender — "may in some emergencies be best." Some 
were willing to acquiesce in the modification suggested by Mr. 
Madison, but Mr. Morris, who submitted the motion, objected, 
insisting that if the motion prevailed there would still be room 
left for the notes of a responsible minister, which, as he said, 
" would do all the good without the mischief." Decided objec- 
tions were advanced by Mr. Ellsworth, who said he thought the 
moment a favorable one " to shut and bar the door against 
paper money;" and others expressed their opposition to the 
clause in equally decisive language, even saying that they would 
sooner see the whole plan rejected than retain the three words, 
"and emit bills." Suffice it to say, without reproducing the 
discussion, that the motion prevailed — nine states to two— and 
the clause was stricken out, and no attempt was ever made to 
restore it. Paper money, as legal tender, had few or no advo- 
cates in the convention, and it never had more than one open 
advocate throughout the period the constitution was under 
discussion, either in the convention which framed it, or in the 
conventions of the states, where it was ratified. Virginia 
voted in the affirmative on the motion to strike out that clause, 
Mr. Madison being satisfied that if the motion prevailed it 
would not have the efiect to disable the government from the 
use of treasury notes, and being himself in favor of cutting 



392 MONOFOLUS AND fHE PEOPLE. 

" off the pretext for a paper cv/rrency^ cmd pcMrticularly for 
making the hills a tender^ either for public or private debUP 
Wlieii tlie draft for the constitution was reported, the cl&nse 
prohibiting the states from making anything but gold and 
silver a tender in payment of debts, contained an exception, 
" in case congress consented," but the convention strad^ out 
the exception and made the prohibition absolute, one of the 
members remarking that it was a favorable moment to crush 
out paper money, and all or nearly all of the convention seemed 
to concur in the sentiment. 

* Contemporaneous acts are certainly evidence of intention ; 
and if so, it is difficult to see what more is needed to show 
that the members of that convention intended to withhold 
from the states, and from the United States, all power to make 
anything but gold and silver a standard of value or a tender 
in payment of debts. Equally decisive proof to the same effect 
is found in the debates which subsequently occurred in the 
conventions of the several states, to which the constitution, as 
adopted, was submitted for ratification. Mr. Martin thought 
that the states ought not to be totally deprived of the right to 
emit bills of credit, but he says "that the convention was so 
smitten with the pa])er inouey dreiid that they insisted that the 
prohibition should be Mb8ohite." 

Currency is a word much more comprehensive than the 
word money, as it may include bank bills and even bills of 
excliaui^e, as well as eoins of gold and silver; but the word 
money, as eiii])loyed in the grant of power under consideration, 
means the coins of gold and silver fabricated and stamped as 
required by law, which, by virtue of their intrinsic value, as 
universally acknowledged, and their official origin, become the 
medium of exchange and the standard by which all other 
values are expressed and discharged. Support to the proposi- 
tion that the word money, as employed in that clause, was 
intended to be used in the sense here supposed, is also derived 
from the language employed in certain numbers of the Fede- 
ralist, which, as is well known, were written and published 
during the period the question whether the states would rat^iy 
the constitution was pending in their several conventions. Such 



APPENDIX. 393 

men as the writers of those essays never could have employed 
such language if they had entertained the remotest idea that 
congress possessed the power to make paper promises a legal 
tender. 

Like support is also derived from the language of Mr. Ham- 
ilton in his celebrated report recommending the incorporation 
of a national bank. He first states the objection to the pro- 
posed measure, that banks tend to banish the gold and silver 
of the country; and, secondly, he gives the answer to that 
objection made by the advocates of the bank, that it is imma- 
terial what serves the purpose of money, and then says that the 
answer is not entirely satisfactory, as the permanent increajse 
or decrease of the precious metals in a country can hardly ever 
be a matter of indifference. " As the commodity taken in lieu 
of every other, it (coin) is a species of the most eflfective wealth, 
and as the money of the world it is of great concern to the 
state that it possesses a sufficiency of it to face any demands 
which the protection of its external interests may create." He 
favors the incorporation of a national bank, with power to 
issue bills and notes payable on deraaad in gold and silver^ 
but he expresses himself as utterly opposed to paper emissions 
by the United States, characterizing them as so liable to abuse 
and even so certain of being abused that the government ought 
never to trust itself " with the use of so seducing and danger- 
ous an element." Opposed as he was to paper emissions by 
the United States, under any circumstances, it is past belief 
that he could ever have concurred in the proposition to make 
such emissions a tender in payment of debts, either as a mem- 
ber of the convention which framed the constitution or as the 
head of the trea^^ury department. Treasury notes, however, 
have repeatedly been authorized by congress, commencing 
with the act of 30th of June, 1812, but it was never supposed 
l>efore the time when the several acts in question were passed 
that congress could make snch notes a legal tender in payment 
of debts. Such notes, it was enacted, should be received in 
payment of all duties and taxes laid, and in payment for public 
lands sold by the federal authority. Provision was also made 
in most or all of the acts that tie secretary of the treasury, 



804 UOVOFOUSB AND THE FBOFLB. 

with the approbation of the president, might eanfie treasniy 
notes to be issued, at the par value thereof, in payment of ser- 
vices, of supplies, or of debts for which the United States were 
or might be answerable by law, to such person or persons as 
should be willvng to accept the same in payment; but it never 
occurred to the legislators of that day that such notes could be 
made a legal tender in discharge of such indebtedness, or tliat 
the public creditor could be compelled to accept them in pay- 
ment of his just demands. 

Financial embarrassments, second only in their disastrous 
consequences to those which preceded the adoption of the con- 
stitution, arose towards the close of the last war with Great 
Britain, and it is a matter of history that those embarrassments 
were too great and pervading to be overcome by the use of 
treasury notes or any other paper emissions without a specie 
basis. Expedients of various kinds were suggested, but it 
never occurred either to the executive or to congress that a 
remedy could be found by making treasury notes, as then author- 
ized, a legal tender, and the result was that the second bank of 
the United States was incorporated. Paper currency, it may be 
said, was authorized by tliat act, which is undoubtedly true; 
and it is also true that the bills or notes of the bank were made 
receivable in all payments to the United States, if the same 
were at the time payable on demand, but the act provided that 
the corporation should not refuse, under a heavy penalty, the 
payment in gold and silver, of any of its notes, bills, or obli- 
gations, nor of any moneys received upon deposit in the bank 
or in any of its offices of discount and deposit. 

Serious attempt is made, strange to say, to fortify the propo- 
sition that the acts in question are constitutional from the fact 
that congress, in providing for the use of treasury notes, 
and in granting the charters to the respective national banks, 
made the notes and bills receivable in payment of duties and 
taxes, but the answer to the suggestion is so obvious that it is 
hardly necessary to pause to suggest its refutation. Creditors 
may exact gold and silver or they may waive the right to require 
such money, and accept cr^it currency, or commodities, other 
than gold and silver, and the United States, as creditors, or in 



APFKNDrZ. 395 

the exercise of their express power to levy and collect taxes, 
duties, imposts, and excises, may, if they see fit, accept the 
treasury notes or bank bills in such payments as substitutes 
for the constitutional currency. Further discussion of the 
proposition is unnecessary, as it is plainly destitute of any 
merit whatever. 

Resort was also had to treasury notes in the revulsion of 
1837, and during the war with Mexico, and also in the great 
revulsion of 1857, but the new theory that congress could make 
treasury notes a legal tender was not even suggested, either by 
the president or by any member of congress. 

Seventy years are included in this review, even if the com- 
putation is only carried back to the passage of the act establish- 
ing the mint, and it is clear that there is no trace of any act, 
executive or legislative, within that period, which affords the 
slightest support to the new constitutional theory that congress 
can by law constitute paper emissions a tender in payment of 
debts. Even Washington, the father of our country, refused 
to accept paper money in payment of debts contracted before 
the war of independence, and the proof is ftdl to the point 
that Hamilton, as well as Jefferson and Madison, was opposed 
to paper emissions by the national authority. 

SuflScient also is recorded in the reports of the decisions of 
this court to show that the court, from the organization of the 
judicial system to the day when the judgments in the cases 
before the court were announced, held opinions utterly opposed 
to such a construction of the constitution as would authorize 
congress to make paper promises a legal tender as between 
debtor and creditor. Throughout that period the doctrine of 
the court has been, and still is, unless the opinion of the court 
just read constitutes an excq^tion, that the government of the 
United States, as ordained and established by the constitution, 
is a government of enumerated powers; that all the powers 
not delegated to the United States by the constitution, nor 
prohibited by it to the states, are reserved to the states respect- 
ively or to the people; that every power ves i in the Federal 
government under the constitution is in its ture sovereign, 
and that congrc;^ may pass all laws ne< ^ < proper to 





M6 MCnVOFOUlS AND TKE FEQFLE. 

eKBCj the same into exectitioo, or^ in other words^ that ihb 
pQfWet bemg sovereign indudeSf by force of the term, tlie 
liqi^Bite meaiiB^fairlj applicable t^> tli6 attainment of the con* 
timplated end, which are not precluded bj restrictions or 
ezx^ptions ezpreesed or necessarily implied, and not oontrazj 
to the eBsential ends of political aoeiely. 

Definitions slightly different have been given bjr^UEbfent 
jnriBts to the words ^neoessaiy and proper," emptojed in ^ 
duise of the eonstitation conferring npon congKB^ Oita pom 
to pass laws for carrying the express grants <tf poirar into 
' execntion, but no one ever pretended that a oon^anirtmi or 
definition conld be sustained that the graieral efauue would 
mthorize the employment of such means in the execniioii of 
one express grant as would practically nullify another or fonder 
another utterly nugatory. Oircumstanees made it noeessary 
that Mr. Hamilton should examine that phrase at a very eady 
period after the constitution was adopted, and the defimtion 
he gave to it is as follows: ''All the means requisite and fidiiy 
applicable to the attainment of the end of such power wh^ 
are not precluded by restrictions and exceptions specified in 
the constitution, and not contrary to the essential ends of 
political society." Twenty-five years later the question was 
examined by the supreme court and authoritatively settied, the 
chief justice giving the opinion. His words were: " Let the 
end be legitimate, let it be within the scope of the constitution, 
and all means which are appropriate, which are plainly adapted 
to that end, and which are not prohibited but consistent with 
the letter and spirit of the constitution, are constitutional." 

Substantially the same definition was adopted by the present 
chief justice in the former case, in which he gave the opinion 
of the court, and there is nothing contained in the Federal 
reports giving the slightest sanction to any broader definition 
of those words. Take the definition given by Mr. Hamilton, 
which, perhaps, is the broadest, if there is any difference, and 
still it is obvious that it would give no countenance whatever 
to the theory that congress, in passing a law to execute one 
express grant of the constitution, conld autiiorize means which 
would nullify another express grant, or render it nugatory £ar 



AFFENDDL 39l 

the attainment of the. end which the framere of the oonstitn- 
tion intended it should accomplish. 

Anthority to coin money was vested in congress to provide 
a permanent national standard of value, everywhere the same, 
and subject to no variation except what congress shall make 
under the power to regulate the value thereof, and it is not 
possible to affirm, with any hope that the utterance will avail 
in the argument, that the power to coin money is not an 
express power, and if those premises are conceded it cannot be 
shown that congress can so expand any other express power by 
implication as to nullify or defeat the great purposes which the 
power to coin money and establish a standard of value was 
intended to accomplish. 

Government notes, it is conceded, may be issued as a means 
of borrowing money, because the act of issuing the notes may 
be, and often is, a requisite means to execute the granted power, 
and being fairly applicable to the attainment of the end, the 
notes, as a means, may be employed, as they are not precluded 
by any restrictions or exceptions, and not repugnant to any 
other express grant contained in the constitution. Light- 
houses, buoys, and beacons may be erected under the power to 
regulate commerce, but congress cannot authorize an officer 
of the government to take private property for such a purpose 
without just compensation, as the exercise of such a power 
would be repugnant to the fifth amendm^t. Power to levy and 
collect taxes is conferred upon congress, but the congress can- 
not tax the salaries of the state judges, as the exercise of such 
a power is incompatible with the admitted power of the states 
to create courts, appoint judges, and provide for their compen- 
sation. 

Congress may also impose duties, imposts, and excises to 
pay the debts and provide for the common defense and general 
welfare, but the congress cannot levy any tax or duty on arti- 
cles exported from any state, nor can congress give any prefer- 
ence by any regulation of commerce or revenue to the ports 
of one state over those of another, as the exercise of any such 
power is prohibited by the constitution. Exclusive power is 
vested in congress to declare war, to raise and support anniesi 



to provide and Tnaintrin a uavj^ and to make mles for the gov. 
ersmeDt and regulation of the land and uaval forcea Appro- 
ptiati<HlB to execute those powers maj be made bj coDgrees^ 
but no appropriatimiB of money to that use can be made for a 
IdQger tenn than two years, as an appropriation for a longer 
terai is ezpresaly prohibited by the Bame clause which conferg 
the power to raise and support armies. By virtue of thm^ 
gran^ of power congress may erect forts and magazine$« may 
ocmstract navy-yards and dock -yards, maunfacture arms and 
munitions of war^ and mav ^^tahlish ^Jc^pots •Aud otlitT iieeifol 
bnitdings for thdr preservation, but the oongresa oannot take 
private property for that purpose without making eompeoM^ 
.tion t6 the owner, as the constitution provides iiuA ptitata 
property shall not be taken for pubUc wm withoul piit oo»» 
pensation. 

Legislative power under the constitution can nearer be tif^ 
ftdly extended to the ezerdse of a power not gy an t ed hcht to 
that which is prohibited, and it makes no diffuenoe wlntiier 
the prohibition is express or implied, as aa implied pioliibi-^ 
tion, when once ascertained, is as effectual to negative Ae 
right to legislate as one that is expressed; the rule being diat 
congress, in passing laws to carry the express powers granted 
into execution, cannot select any means as requisite for that 
purpose or as fairly applicable to the attainment of the end, 
which are precluded by restrictions or exceptions contained 
in the constitution, or which are cont^ry to the essential ends 
of political society. 

Concede these premises, and it follows that the acts of con- 
gress in question cannot be regarded as valid unless it can be 
held that the power to make paper emissions a legal tender in 
payment of debts can properly be implied from the power to 
coin money, and that such emissions, when enforced by such a 
provision, become the legal standard of value under the con- 
stitution. Extended discussion of the first branch of the prop- 
osition would seem to be unnecessary, as the dissenting jus- 
tices in the former case abandoned that point and frankly 
stated in the dissenting opinion delivered that they were not 
able to see in those clauses, '^ standing alone, a sufficient vrar- 



APPENDIX. $99 

rant for the exercise of this power." Through their organ on 
the occasion they referred to the power to declare war, to sup- 
press insurrection, to raise and support armies, to provide and 
maintain a navy, to borrow money, to pay the debts of the 
Union, and to provide for the common defense and general 
welfare, as grants of power conferred in separate clauses of 
the constitution. Reference was then made in very appropri- 
ate terms to the exigencies of the treasury during that period 
and the conclusion reached, though expressed interrogatively, 
appears to be that the provision making the notes a legal ten- 
der was a necessary and proper one as conducing " towards 
the purpose of borrowing money, of paying debts, of raising 
armies, of suppressing insurrection," or, as expressed in an- 
other part of the same opinion, the provision was regarded as 
"necessary and proper to enable the government to borrow 
money to carry on the war." 

Suggestions or intimations are made in one or more of the 
opinions given in the state courts that the power assumed by 
congress may be vindicated as properly implied from the power 
to coin money, but inasmuch as that assumption was not the 
ground of the dissent in the former case, and as the court is 
not referred to any case where a court affirming the validity 
of the acts of congress in question has ventured to rest their 
decision upon that theory, it does not appear to bo necessary 
to protract the discussion upon that point. 

Such notes are not declared in the acts of congress to be a 
standard of value, and if they were the provision would be as 
powerless to impart that quality to the notes as were the pro- 
cesses of the alchemist to convert chalk into gold, or the con- 
trivances of the mechanic to organize a machine and to give it 
perpetual motion. Gold and silver were adopted as the stand- 
ard of value, even before civil governments were organized, 
and they have always been regarded as such to the present 
time, and it is safe to affirm that they will continue to be such 
by universal consent, in spite of legislative enactments and of 
judicial decisions. Treasury notes, or the notes in question, 
called by what name they may be, never perfonned that office, 
even for a day, and it may be ad^'Ml that neither legislative 



40(1^ mmopoiiBB amo thk fboha 

m«etmeiitB nor judicial deeifiions can compel Ae 
fpiprld to accept paper emissioBB of any kind as ito aiwidttd 
Gi^wsiae by which all other valnes are to be measnied. Ifolh- 
iHg but money will in fact perform that office, and it is dear 
Ihit ndther legislasive enactments nor judicial deefiBioDa eaa 
perform conmierdal imposisibilities. Commoditiea nndoabl- 
edty may be exchanged as matter of barter, or Qxb aeUer may 
accept paper promises instead of money, but it ia nevertiiekliB 
true, as stated by Mr. Hnskisson, that money is not <mly die 
common m^aaure and oofnmon repreBentoElAme of all oliier 
commodities, but also the common and uniyersal eqaiTalent 
Whoeyer buys, gives, whoever sells, receives sudi a quantity 
of pure gold or silver as is equivalent to the iEurtide bouglKt « 
»>ld; or if he gives or receives paper instead of monqr, lie 
gives and receives that which is valuable only as it stipidateB 
the paynent of a given quantity of gold (»r silver. 

'^Most unquestionably," said Mr. Webster, ^ there ia no 
legal tender, and there can be no legal tender, in this ipomitiy, 
under the authority of this government, or any other, but gold 
and silver. * * This is a constitutional principle, perfi^etly 
plain and of the very highest importance." He admitted that 
no such express prohibition was contained in the constitu- 
tion, and then proceeded to say: "As congress has no power 
granted to it in this respect but to coin money and to regulate 
the value of foreign coins, it clearly has no power to subati- 
tute paper or anything else for coin as a tender in payment of 
debts and in discharge of contracts," adding that "congress 
has exercised the power fully in both of its branches. It has 
coined money and still coins it, it has regulated the value of 
foreign coins and still regulates their value. The legal tender, 
therefore, the ooNSTmrnoNAL standard of vat.ue, is established 
AND CANNOT BE OVERTHROWN." Bcjond pcradvcnture he was 
of the opinion that gold and silver, at rates fixed by congress, 
constituted the legal standard of value, and that neither con- 
gress nor the states had authority to establish any other stand- 
ard in its place. 

Views equally decisive have been expressed by this court in 
a case where the remarks were pertinent to the question pre- 



APPENDIX. 401 

sented for decision. Certain qnestions were certified here 
which arose in the circuit court in the trial of an indictment 
in which the defendant was charged with having brought into 
the United States from a foreign place, with intent to pass, 
utter, publish, and sell certain false, forged, and couterfeit 
coins, made, forged, and counterfeited in the resemblance and 
similitude of the coins struck at the mint. Doubts were 
raised at the trial whether congress had the power to pass the 
law on which the indictment was founded. Objection was 
made that the acts charged were only a fraud in traffic, and, as 
such, were punishable, if at all, under the state law. Bespon- 
sive to that suggestion the court say that the provisions of the 
section " appertain rather to the execution of an important 
trust invested by the constitution, and to the obligation to 
fulfill that trust on the part of the government, namely, the 
trust and the duty of creating and maintaining a uniform, and 
pv/re metallic standard of value throughout the Union / that 
the po\ier of coining money and of regulating its value was 
delegated to congress by the constitution for the very purpose 
of creating and 'preserving the uniformity and pu/rity of 
such a standard of value, and on account of the impossibility 
which was foreseen of otherwise preventing the inequalities 
and the confusion necessarily incident to the diflerent views 
of policy which in diflerent communities would be brought to 
bear on this subject. The power to coin money being thus 
given to congress, founded on public necessity, it must carry 
with it the correlative power of protecting the creature an(* 
object of that power." Appropriate suggestions follow as to 
the right of the government to adopt measures to exclude 
counterfeits and prevent the true coin from being substituted 
by others of no intrinsic value, and the justice delivering the 
opinion then proceeds to say, that congress " having emitted a 
circulating medium, a standard of value indispensable for the 
'purposes of the community and for the action of the govern- 
ment itself, the congress is accordingly authorized and bound 
in duty to prevent its debasement and expulsion and the de 
struction of the ^neral confidence and convenience by thr 
26 



isaSbaoL and Biibstitati<m of a apuriouB coin in Men of 
tiiidnal cnnenej." ** 

^Squally dedsiye views were expressed by the conrl t 
etiMer, in the case of Ofoin v. Breedlaw, in whidi tiie i 
otiSse eonrt was ddivered by the late Mr. Jnstiee Ostroti,. Am 
wiiom no jnstiee who ever sat in the oonrt was more of^pond 
to die expression of an opinion on a point not involved in Urn 
leeoid. 

ISo state shall ooin money, emit biUs of credit, or make. 
siEything bnt gold and silver a tender in payment df debiB; 
l&aae prohibitions, said Mr. Justice Washii^^ton, aasodated 
with the powers granted to congress to ooin moneiy and 
fiq^te the valne thereof and foreign coin, most obtionify 
ocmstitute members of the same fisunUy, being npon the same 
sttbject and governed by the same policy. This poliqy, said 
Hie learned justice, was to provide and fix a nniform steodaxd 
of valne thronghout the United States, by which the commer- 
cial and other dealings between the citizens thereof or iwtween 
tliem and foreigners, as wdl as the moneyed transaetiooa 
of the government should be regulated. Language ao w«ll 
ehosen and so explicit cannot be misunderstood, and the views 
expressed by Mr. Justice Johnson, in the same case, are even 
more decisive. He said the prohibition in the constitution to 
make anything but gold or silver coin a tender in payment 
of debts is express and tmi/versal. The framers of the consti- 
tution regarded it as an evil to be repelled without modifica- 
tion, and that they have therefore left nothing to be inferred 
or deduced from construction on the subject. 

Eecorded as those opinions have been for forty-five years, 
and never questioned, they are certainly entitled to much 
weight, especially as the principles which are there laid down 
were subsequentiy affirmed in two cases by the unanimous 
opinion of this court 

Strong support to the view here taken is also derived from 
the case of Craig v. Missaurij last cited, in which the opinion 
was given by tiie chief justice. Loan certificates issued by 
the state were the consideration of the note in suit in that 
case, and the defense was that the certificates were bills of 



MS 

credit, and that the consideration of the note was ill^al. 
Eesponsive to that defense the plaintiff insisted that the 
certificates were not bills of credit, because they had not been 
made a legal tender, to which the court replied, that the 
emission of bills of credit and the enactment of tender laws 
were distinct operations, independent of each other; that both 
were forbidden by the constitution; that the evils of paper 
money did not result solely from the quality of its being made 
a tender in payment of debts; that that quality might be the 
most pemicuyus one, but that it was not an essential quality 
of bills of credit nor the only mischief resulting from such 
emissions. 

Eemarks of the chief justice in the case of Stvrges v. 
Crotoni/nshield, may also be I'eferred to as even more explicit 
and decisive to the same conclusion than anything embodied 
in the other cases. He first describes, in vivid colors, the 
general distress which followed the war in which our inde- 
pendence was established. Paper money, he said, was issued, 
worthless lands and other property of no use to the creditor 
were made a tender in payment of debts, and the time of pay- 
ment stipulated in the contract was extended by law. Mischief 
to such an extent was done, and so much more was appre- 
hended, that general distrust prevailed, and all confidence 
between man and man was destroyed. Special reference was 
made to those grievances by the chief justice, because it was 
insisted that the prohibition to pass laws impairing the obliga- 
tion of contracts ought to be confined by the court to matters 
of that description, but the court was of a different opinion, 
and held that the convention intended to establish a great 
principle, that contracts should be inviolable, that the provision 
was intended " to prohibit the use of any means by which the 
same mischief might be produced." He admitted that that 
provision was not intended to prevent the issue of paper 
money, as that evil was remedied and the practice prohibited 
by the clause forbidding the states to " emit bills of credit," 
inserted in the constitution expressly for that purpose, and he 
also admitted that the prohibition to emit bills of credit was 
not intended to restrain the states from enabling: debtors to 



^•%^, 



4iM MOHOPOUBI AHO THE VMOPUL 

cBaeharge Hieir debts by the tender of property of no rad irsliie 
toliie creditor, ^^becaoBe for that suligect ilso partieiilir pro- 
HA&a is made" in the oonstitation; bat he added, '^HotHOMi 

Sirt GOLD ABD 8ILVSB COIN OAK HB XADK A TBBDDfBK IV PA 



Utteranoee of the kind are found thronghoat the repented 
decisions of this conrt, but there is not a sentence or ivord to 
be found within those volumes, from the organization of the 
court to the passage of the acts of congress in .queBtioiiy to 
support the opposite theory. 

Power, as before remarked, was vested in the congran under 
the confederation to borrow money and emit bills ot erediti 
and history shows that the power to emit such bills had been 
exercised before the convention which firamed the conslitatioii 
issembled, to an amount exceeding $860,000,000. StiH the 
draft of the constitution, as reported, contained the wrads, 
^and to emit bills," appended to the clause antheming con- 
gress to borrow money. When that clause was reached, says 
Hr. Martin, a motion was made to strike out the words, ^to 
«nit hilU oforedU;^^ and his accoimt of what followed afibids 
the most persuasive and convincing evidence that the convrai- 
tion, and nearly every member of it, intended to put an end to 
the ^exercise of such a power. Against the motion, he eays, we 
urged that it would be improper to deprive the congress of 
that power; that it would be a novelty unprecedented to 
establish a government which should not have such authority; 
that it was impossible to look forward into futurity so far as 
to decide that events might not happen that would render the 
exercise of such a power absolutely necessary, etc But a 
majority of the convention, he said, being wise beyond eveiy 
event, and being willing to risk any political evil rather than 
admit the idea of a paper emission m cmy possibls oasej refused 
to trust the authority to a government to which they were 
lavishing the most unlimited powers of taxation, and to the 
mercy of which they were willing blindly to trust the liberty 
and property of the citizen of every state in the Union, and 
^they erased that clause from the eystem^ 

More forcible vindication of the action of the convention 



APPENDIX. 406 

oonld hardly be made than is expressed in the language of the 
Federalist, and the authority of Jndge Story warrants the 
statement that the language there employed is "justified by 
almost every contemporary writer," and is " attested in its 
truth by facts" beyond the influence of every attempt at con- 
tradiction. Having adverted to those fac^, the commentator 
proceeds to say, " that the same reasons which show the neces- 
sity of denying to the states the power of regulating coin, 
prove with equal force that they ought not to be at liberty to 
substitute a paper medium instead of coin." 

Emissions of the kind were not declared by the Continental 
congress to be a legal tender, but congress passed a resolution 
declaring that they ought to be a tender in payment of all 
private and public debts, and that a refusal to receive the 
tender ought to be an extinguishment of the debt, and recom- 
mended the states to pass such laws. They even went further, 
and declared that whoever should refuse to receive the paper 
as gold or silver should be deemed an enemy to the public 
liberty; but our commentator says that these measures of 
violence and terror, so far from aiding the circulation of the 
paper, led on to still further depreciation. New emissions 
followed and new measures were adopted to give the paper 
credit by pledging the public faith for its redemption. Eflbrt 
followed eflFort in that direction, until the idea of redemption 
at par was abandoned. Forty for one was oflFered, and the 
states were required to report the bills under that regulation, 
but few of the old bills were ever reported, and of course few 
only of the contemplated new notes were issued, and the bills 
in a brief period ceased to circulate, and in the course of that 
year quietly died in the hands of their possessors. 

Bills of credit were made a tender by the states, but all such, 
as well as those issued by the congress, were dead in the hands 
of their possessors before the convention assembled to frame' 
the constitution. Intelligent and impartial belief in the 
theory that such men, so instructed, in framing a government 
for their posterity as well as for themselves, would deliberately 
vest such a power, either in congress or the states, as a part 
of their perpetual system, can never, in my judgment, be 



406 UOBOtOUM AMD TBI 

iacored in the ftoe of the reocnrded evidenees to the eontmy 
#hioh the political and jndidal hietory of onr coimtry sffixrda. 
Bach evidence, so persnasiTe and convinciDg as it is, mntt 
ultimately bring all to the conclusion that neither the oongress 
nor the states can make anything but gold or silver coin a 
tender in payment of debts. 

Ezdusive power to coin money is certainly vested in ocm- 
gress, but ^ no amount of reasoning can show that executing 
a promissory note, and ordering it to be taken in payment of 
public and private debts is a species of coining money." 

Complete refutation of such theoiy is also found in die dis- 
senting opinion in the former case, in which Hie justice who 
delivered the opinion states that he is not able to deduce the 
power to pass the laws in question from that dauae of the 
constitution, and in which he admits without qualification that 
the provision making such notes a legal tender does undonbt* 
edly impair the ^obligation of contracts made before its pass- 
age." Extended argument, therefore, to show that the acts in 
question impair the obligation of contracts made before their 
passage is unnecessary, but the admission stops short of the 
whole truth, as it leaves the implication to be drawn that the 
obligation of subsequent contracts is not impaired by such 
legislation. Contracts for the payment of money, whether 
made before or after the passage of such a provision, are con- 
tracts, if the promise is expressed in dollars, to pay the speci- 
fied amount in the money recognized and established by the 
constitution as the standard of value, and any act of congress 
which in theory compels the creditor to accept paper emissions, 
instead of the money so recognized and established, impairs 
the obligation of such a contract, no matter whether the con- 
tract was made before or after the act compelling the creditor 
to accept such payment, as the constitution in that respect is a 
part of the contract, and by its terms entitles the creditor to 
demand payment in the medium which the constitution recog- 
nizes and establishes as the standard of value. 

Evidently the word dollar, as employed in the constitution, 
means the money recognized and established in the express 
power vested in congress to coin money, regulate the value 



AFFENDIX. 407 

thereof, and of foreign coin, the fi-amers of the constitution 
having borrowed and adopted the word as used by the Conti- 
nental congress in the ordinance of the 6th of July, 1785, and 
of the 8th August, 1786, in which it was enacted that the 
money unit of the United States should be "one dollar," and 
that the money of account should be dollars and fractions of 
dollars, as subsequently provided in the ordinance establishing 
a mint. 

Eepeated decisions of this court, of recent date, have estab- 
lished the rule that contracts to pay coined dollars can only be 
satisfied by the payment of such money, which is precisely 
equivalent to a decision that such notes as those described in 
the acts of congress in question are not the money recognized 
and established by the constitution as the standard of value, 
as the money so recognized and established, if the contract is 
expressed in dollars, will satisfy any and every contract between 
party and party. Beyond all question the cases cited recognize 
" the fact accepted by all men throughout the world, that value 
is inherent in the precious metals; that gold and silver are in 
themselves values, and being such, and being in other respects 
best adapted to the purpose, are the only proper ^measures of 
value/ tliat these values are determined by weight and purity, 
and that form and impress are simply certificates of value, 
worthy of absolute reliance only because of the known integ- 
rity and good faith of the government which " put them in 
circulation. 

When the intent of the parties as to the medium of pay- 
ment is clearly expressed in a contract, the court decide in 
Butler V. HorwUzy above cited, that damages for the breach 
of it, whether made before or since the enactment of these 
laws, may be properly assessed so as to give eflect to that intent, 
and no doubt is entertained that that rule is correct. Parties 
may contract to accept payment in treasury notes, or specific 
articles, or in bank bills, and if they do so they are bound to 
accept the medium for which they contracted, provided the 
notes, specific articles, or bills, are tendered on the day the pay- 
ment under the contract becomes due, and it is dear that such 
a tender, if seasonable and sufficient in amounti is a good 



ins 1ION0FOLQB ASD THX IBOFIO. 

4afaii8e to the action. Decided gum $i»mnflSbtk^o0ii^^ 
i fiirther, and hold, evea where tiie oontraci hptffMm 1m 
f, and Ihe promise is ezprefised in dollara, tibal tt faader 
liftbaiik bilk is a good tender if Aeparty to whom it^mpniade 
|teied his objections to receiving it wholly npon Hm gft^vrnd 
tbfct the amount was not sufficient. 

j^&rant all that, and still it is dear that whsn liie eonlrMliB 
tm the payment of a certain soi^ of money, and the fofMEube 
18 expressed in dollars, or in coined dollars, the promisee^ if he 
Msa fit, may lawfoUy refuse to accept payment in ma^e^n&t 
iMdium than gold and silver, made a l^;al tender by Mi of 
congress passed in pursuance of that providon of the CM0lii»- 
tion lidiich vests in congress the power to coin money, legnlile 
Ite value thereof, and of foreign coin. • 
- Foreign coin of gold imd silver may be made a legal taDdor, 
ii tiie power to regulate the value thereof is vested in cimgraH 
ai weU as the power to regulate the value of the coins fiAfkitod 
and stamped at the mint 

Opposed, as the new theory is, by such a body of evidetiea, 
oevering the whole period of our constitutional histoty, all 
tending to the opposite conclusion, and unsupported as the 
theory is by a single historical fact, entitled to any weight, it 
would seem that the advocates of the theory ought to be able 
to give it a fixed domicil in the constitution, or else be willing 
to abandon it as a theory without any solid constitutional 
foundation. Vagrancy in that behalf, if conceded, is certainly 
a very strong argument at this day, that the power does not 
reside in the constitution at all, as if the fact were otherwise, 
the period of eighty-five years which has elapsed since the con- 
stitution was adopted is surely long enough to have enabled its 
advocates to discover its locality, and to be able to point out 
its home to those whose researches have been less successful 
and whose conscientious convictions lead them to the conclu- 
sion that, as applied to the constitution, it is a myth without a 
habitation or a name. 

Unless the power to enact such a provision can be referred 
to some one or more of the express grants of power to con- 
gress, as the requisite means, or as necessary and proper for 



ATFENDIX. 409 

carrying such express power or powers into execution, it is 
usually conceded that the provision must be regarded as uncon- 
stitutional, as it is not pretended that the constitution contains 
any express grant of power authorizing such legislation. Powers 
not granted cannot be exercised by congress, and certainly all 
must agree that no powers are granted except what are ex- 
pressed or such as are fairly applicable as requisite means to 
attain the end of a power which is granted, or, in other words, 
are necessary and proper to carry those which are expressed 
into execution. 

P^ressed by these irrepealable rules of construction, as applied 
to the constitution, those who maintain the affirmative of the 
question under discussion are forced to submit a specification. 
Courts, in one or more cases, have intimated that the power in 
question may be implied from the express power to coin money, 
but inasmuch as no decided case is referred to where the judg- 
ment of the court rests upon that ground, the suggestion will 
be dismissed without further consideration, as one involving a 
proposition too latitudinous to require recitation. Most of the 
cases referred to attempt to deduce the power to make such 
paper emissions a legal tender from the express power to bor- 
row money, or from the power to declare war, or from the two 
combined, as in the dissenting opinion in the case which is 
now overruled. 

Authority, it is conceded, exists in congress to pass laws 
providing for the issue of treasury notes, based on the national 
credit, as neoessaiy and proper means for ftilfiUing the end of 
the express power to borrow money, nor can it be doubted at 
this day, that such notes, when issued by the proper authority, 
may lawfully circulate as credit currency, and that they may, 
in that conventional character, be lawfully employed, if the act 
authorizing their issue so provides, to pay duties, taxes, and all 
the public exactions required to be paid into the national 
treasury. Public creditors may also be paid in such currency 
by their own consent, and they may be used in all other cases, 
where the payment of such notes comports with the terms of 
the contract Established usage, founded upon the practice of 
the government, often repeated, has sanctioned these ruleSi 



0$ ICOHOFOim Aim 9SS FBtKFLB. 

iptfl it may now be eaid that they are not open ^ mmiww m M^ 

Imt the qnefition in the oafies before tibe eoiirt Ji piiitiiar^^t^ 

^ipgrem may dedare eneh notes to be lawM iBODey, Qiike 

^SumsL a legal tender, and impart to raeh a cnmoisj flie^Ml^f 

^^. being a standard of valne, and compel creditota ti^ aieQQpt 

4ie payment of their debts in sndi aonnrenfljas tbe a^fihBt 

.#f the money recognized and established by Hie 

ii.tbe standard of value by which the valnie of all • 

M^ties is to be measured. Financial measores, of 

kinds, for borrowing money to supply the wants of thai 

i^, beyond Uie receipts from taxation, and tl^ eelea of the 

jppblic lands, have been adopted by the gpvemm^t riMO Ae 

United States became an independent natbn. Subsci^plipiis 

.|br a loan of twelve millicms of dollars w^e^ on die ^tb of 

; August, 1790, directed to be opened at the^troasuiy, to be 

niade payable in certificates issued for the debt aooovih^f lb 

Jheir specie value. Measures of this kind were repeated in 

I|i4[>^ succession for several years, and laws providmg fi>r loans 

^ one form or another appear to have been the preftired mode 

ijof borrowing money, until the 80th of June, 181S, when ^flist 

met was passed ^to authorise the issue of treasury notes." 

Loans had been previously authorized in repeated instanoes, 
as will be seen by the following references, to which many 
more might be added. 

Earnest opposition was made to the passage of the first act 
of congress authorizing the issue of treasury notes, but the 
measure prevailed, and it may be remarked that the vote on 
the occasion was ever after regarded as having settled Uie 
question as to the constitutionality of such an act Five 
millions of dollars were directed to be issued by that act, and 
the secretary of the treasury, with the approbation of the 
president, was empowered to cause such portions of the notes 
as he might deem expedient to be issued at par '^ to such public 
creditors or other persons as may choose to receive stu;h notes 
in payment^^^ it never having occurred to any one that even a 
public creditor could be compelled to receive such notes in 
payment except by his own consent Twenty other issues of 
such notes were authorized by congress in the course of the fifty 



APPENDIX. 411 

years next after the passage of that act and before the passage 
of the acts making such notes a legal tender, and every one of 
such prior acts, being twenty in all, contains either in express 
words or by necessary implication, an equally decisive negation 
to the new constitutional theory that congress can make paper 
emissions either a standard of value or a legal tender. Super- 
added to the conceded fact that the constitution contains no 
express words to support such a theory, this long and unbroken 
usage, that treasury notes shall not be constituted a standard 
of value nor be made a tender in payment of debts, is entitled 
to great weight, and when taken in connection with the per- 
suasive and convincing evidences, derived from the published 
proceedings of the convention, that the iramers of the consti- 
tution never intended to grant any such power, and from the 
recorded sentiments of the great men who have arguments in 
favor of the reported draft procured its ratification, and 
supported as that view is by the repeated decisions of this 
court, and by the infallible rule of interpretation that the 
language of one express power shall not be so expanded as to 
nullify the force and effect of another express power in the 
same instrument, it seems to me that it ought to be deemed 
final and conclusive that congress cannot constitute such notes 
or any other paper emissions a constitutional standard of value, 
or make them a legal tender in payment of debts — especially 
as it covers the period of two foreign wars, the creation of the 
second national bank, and the greatest financial revulsions 
through which our country has ever passed. 

Guided by the views expressed in the dissenting opinion in 
the former case, it must be taken for granted that the legal 
tender feature in the acts in question was placed emphatically, 
by those who enacted the provision, upon the necessity of the 
measure to the further borrowing of money and maintaining 
the army and navy, and such appears to be the principal ground 
assumed in the present opinion of the court Enough also 
appears in some of the interrogative sentences of the dissen- 
ting opinion to show that the learned justice who delivered 
it intended to place the dissent very largely upon the same 
ground. 



m 

^ Kothiog need be added, it would aeem, to ghow that tht 
jgwer €o makesoflh notes a standard of value and a legal tender 
jOisdKiot be deriyed from the power to bi»rrow monejr, without 
|0> expanding it by ixnpUoatioti m to nullify the power to ooiti 
0m^j and fegolate its value, nor ^vithout extending the scope 
pud^operation of the power to borrow money to an object never 
fiQ9|templated by the frazners of the eonBtitutlon; and if m^ 
tmn it only remainB to inquire whether it may be ii^pUad 
i&om the power to dedare war, to raise and support armi^, or 
lo provide and maint^n a navy, or ^^ to enable the govemment 
to borrow money to carry on the war/' as the phraae is In the 
tliaflen|ing opinion in the former case. 

Money is undoubtedly the sinews of war, btit the power to 
laiae money to carry on war, nnder the couBtitution, is not an 
iinplied p6wer, and whoever adopts that theory commits a great 
•onstitatiQnal error. Congress may declare war and con gmsm 
QMy appropriate all moneys in the treasury to carry on the war^ 
or congress may coin money for that purpose, or borrow money 
to any amotint for the same purpose, or congrees may levy and 
collect tax^ daties, imposts, anid ocei^^ to replenish tlie 
treasury, or may dispose of tHe public lands or othw property 
belonging to the United States, and may in fact, by the exercise 
of the express powers of the constitution, conimtod the whole 
ivealth and substance of the people to sustiEdn the public credit 
and prosecute the war to a successful termination. IVo foreign 
wars were successfully conducted by means derived ^m those 
sources, and it is not doubted that those express powers will 
always enlEtble congress to maintain the national credit and 
defray the public expenses in every emergency which may 
arise, even though the national independence should be assailed 
by the combined forces of all the rest of the civilized world. 
All remarks, therefore, in the nature of entreaty or appeal, in 
favor of an implied power to fulfill the great purpose of national 
defense or to raise money to prosecute a war, are a mere waste 
of words, as the most powerful and comprehensive means to 
accomplish the purpose for which the appeal is made are found 
in the express powers vested in congress to levy and collect 
taxes, duties, imposts, and exercise without limitation as to 




AFPENDIX. 418 

amonnt« to borrow money also without limitation, and to coin 
money, dispose of the public lands, and to appropriate all 
moneys in the public treasury to that purpose. 

Weighed in the light of these suggestions, as the question 
under discussion should be, it is plain, not only that the exercise 
of such an implied power is unnecessary to supply the sinews 
of war, but that the framers or the constitution never intended 
to trust a matter of such great and vital importance as that of 
raising means for the national defense or for the prosecution 
of a war to any implication whatever, as they had learned from 
bitter experience that the great weakness of the confederation 
during the war for independence consisted in the want of such 
express powers. Influenced by those considerations the 
framers of the constitution not only authorized congress to levy 
and collect taxes, duties, imposts, and excises to any and every 
extent, but also to coin money and to borrow money without 
any limitation as to amount, showing that the argument that 
to deny the implied power to make paper emissions a legal 
tender will be to cripple the government, is a mere chimera, 
without any solid constitutional foundation for its support. 

Comprehensive, however, as the power of federal taxation 
is, being without limitation as to amount, still there are some 
restrictions as to the manner of its exercise, and some excep- 
tions as to the objects to which it may be applied. Bills for 
raising revenue must originate in the house of representative^; 
duties, imposts, and excises must be uniform throughout the 
United States; direct taxes must be apportioned according to 
numbers; regulations of commerce and revenue shall not give 
any preference to the ports of one state over those of another; 
nor shall vessels bound to or from one state be obliged to enter, 
clear, or pay duties in another; nor shall any tax or duty be 
laid on articles exported from any state. 

Preparation for war may be made in peace, but neither the 
necessity for such preparation nor the actual existence of war 
can have the effect to abrogate or supersede those restrictiotiA, 
or to empower congress to tax the articles excepted from taxa- 
tion by the constitution. Implied exceptions alik) exiiit, limit* 
ing the power of federal taxation > at of tbo itat«t, 



414 mSSOTOUSB AKD 1HX FBOFLB. 

and when an exception of that character is ast^ertaioed the 
ol>ject8 falling within it are as efitx^tiiallj shielded from 
taxation as those falling within an express exceptton, for the 
plain reason that the "government of the United Stat^ is 
acknowledged by all to be one of enumerated puwer§," from 
which it necessarily follows that powers not granted cannot be 
exercised. 

Moneys may be raised by taxes, duties, imposts, and excises 
to carry on war as well as to pay the public debt or to provide 
for the common defense and general welfare, but no appropri- 
ation of money to that use can be made for a period longer 
than two years, nor can congress, in exercising the power to 
levy taxes for that purpose, or any other, abrogate or supersede 
those restrictions, exceptions, and limitations, as they are apart 
of the constitution, and as such are as obligator}^ in vrm- as In 
peace, as any other rule would subvert, in time of war, every 
restriction, exception, limitation, and prohibition in the coo&ti- 
tution, and invest congress with unlimited power, even 
surpassing that possessed by the British parliament. 

Congress may also borrow money to carry on war, without 
limitation, and in exercising that express power may issue treas- 
ury notes as the requisite means for carrying the express power 
into execution ; but congress cannot eoufetitute such notes a 
standard of value, nor make them a legal tender, neither in time 
of war nor in time of peace, for at least two reasons, either of 
which is conclusive that the exercise of sucli a power is not 
warranted by the constitution: (1.) Because the published pro- 
ceedings of the convention which adopted the constitution, and 
of the state conventions which ratilijJ it, show that those who 
participated in those deliberations never intended to confer 
any such power. (2.) Becrause such a power, if admitted to 
exist, would nullify the effect and operation of the express 
power to coin money, regulate the value tliereof and of foreign 
coin, as it would substitute a paper medium in the place of 
gold and silver coin, which, in itself, as compared with coin, 
possesses no value, is not money, either in the constitutional 
or commercial sense, but only a promise to pay money, is never 
worth par, and often much less, even as domestic exchange, 



AFFENDDL 416 

and is always fluctuating and never acknowledged either as a 
medium of exchange or a standard of value in any foreign 
market known to American commerce. 

Power to issue such notes, it is conceded, exists without 
limitation ; but the question is, whether the framers of the 
constitution intended that congress, in the exercise of that 
power or the power to borrow money, whether in peace or war, 
should be empowered to constitute paper emissions of any kind 
a standard of value, and make the same a legal tender in pay- 
ment of debts. Mere convenience, or even a financial neces- 
sity in a single case, cannot be the test; but the question is, 
what did the framers of the constitution intend at the time 
the instrument was adopted and ratified ? 

Constitutional powers of the kind last mentioned — that is, 
the power to ordain a standard of value and to provide a cir- 
culating medium for a legal tender — are subject to no muta- 
tions of any kind ; they are the same in peace and in war. 
What the grants of power meant when the constitution was 
adopted and ratified they mean still, and their meaning can 
never be changed except as described in the fifth article pro- 
viding for amendments, as the constitution " is a law for rulers 
and people, equally in war and in peace, and covers with the 
shield of its protection all classes of men, and under all cir- 
cumstances." 

Delegated power ought never to be enlarged beyond the fair 
scope of its terms, and that rule is emphatically applicable in 
the construction of the constitution. Kestrictions may at times 
be inconvenient, or even embarrassing; but the power to remove 
the difliculty by amendment is vested in the people, and if 
they do not exercise it, the presumption is that the inconve- 
nience is a less evil than the mischief to be apprehended if 
the restriction should be removed and the power extended, or 
that the existing inconvenience is the lesser of the two evils; 
and it should never be forgotten that the government ordained 
and established by the constitution is a government " of limited 
and enumerated powers," and that to depart from the true 
import an* 1 ting of those powers is to establish a new con- 
stitatiop '^ *^e people what they have not chosen to 



4|S liovoFOLnEB 4]iD m nDonuL 

do for themselves, and to usurp the ftmctioiis of m kgisblor 
and desort those of an espoonder of the law. Aignmenls 
drawn from impolicy or inoonvenienoe, says Judge Stoty^oiig^t 
b^re to be of no weight, as ^ the only soand prind]^ is to 
deelare Ua Ux soripia ^ to follow and to obey.'' 

For these reasons I am of the opinion that tiie judgment in 
eifih of the oases before the ooort should be rerersed. 



CHAPTER IV. 

DIB8ENTINO OFIiaON OF JTJSTIOB FIELD. 

WHILST I agree with the chief justice in the views 
expressed in his opinion in these cases, the great 
importance which I attach to the question of legal tender 
induces me to present some further considerations on the 
subject. 

Nothing has been heard from counsel in these cases, and 
nothing from the present majority of the court, which has 
created a doubt in my mind of the correctness of the judgment 
rendered in the case of Hepburn v. Oriswol-d^ or of the con- 
clusions expressed in the opinion of the majority of the court 
as then constituted. That judgment was reached only after 
repeated arguments were heard from able and eminent counsel, 
and after every point raised on either side had been the subject 
of extended deliberation. 

The questions presented in that case were also involved in 
several other cases, and had been elaborately argued in them. 
It is not extravagant to say that no case has ever been decided 
by this court, since its organization, in which the questions 
presented were more fully argued or more maturely considered. 
It was hoped that a judgment thus reached would not be 
lightly disturbed. It was hoped that it had settled forever, 
that under a constitution ordained, among other things, " to 
establish justice," legislation giving to one person the right to 
discharge his obligations to another by nominal instead of 
actual fulfillment could never be justified. 

I shall not comment upon the causes which have led to a 
reversal of tiiat judgment; they are patent to every one. I will 
simply observe, that the chief justice and the associate justices 
who constituted the majority of the court when that judgment 
was rendered, still adhere to their former convictions. To 
27 (417) 



418 MONOPOLIES Ain> THE PEOPLE. 

them the reasons for the original decision are as cogent and 
convincing now as they were when that decision was pro- 
nounced; and to them its justice, as applies to past contracts, 
is as clear to-day as it was then. 

In the cases now before us the questions stated by order of 
the court, for the argument of counsel, do not present with 
entire accuracy the questions actually argued and decided. » As 
stated the questions are: 1st. Is the act of congress known as 
the legal tender act constitutional as to contracts made before 
its passage? 2d. Is it valid as applicable to transactions since 
its passage ? 

The act thus designated as the legal tender act is the act of 
congress of February 25th, 1862, authorizing the issue of 
United States notes, and providing for their redemption or 
fimding, and for funding the floating debt of the United States, 
and the question as stated would seem to draw into discussion 
the validity of the entire act, whereas the only questions 
intended for argument, and actually argued and decided, 
relate — 1st, to the validity of that provision of the act which 
declares that these notes shall be a legal tender in payment of 
debts, as applied to private debts and debts of the government, 
contracted previous to the passage of the act ; and, 2d, to the 
validity of the provision as applied to similar contracts subse- 
quently made. The case oi Parker v. Davis involves the con- 
sideration of the first question ; and the case of Knox v. Lee 
is supposed by a majority of the court to present the second 
question. 

No question was raised as to the validity of the provisions 
of the act authorizing the issue of the notes, and making them 
receivable for dues to the United States; nor do I perceive 
that any objection could justly be made at this day to these 
provisions. The issue of the notes was a proper exercise of 
the power to borrow money, which is granted to congress with- 
out limitation. The extent to which the power may be exer- 
cised depends in all cases upon the judgment of that body as 
to the necessities of the government. The power to borrow 
includes the power to give evidences of indebtedness and obli- 
gations of repayment. Instruments of this character are 



AFFWXDDL 419 

among the securities of the United States mentioned in the 
Gonstitution. These securities are sometimes in the form of 
certificates of indebtedness, but they may be issued in any other 
form, and in such form and in such amounts as will fit them 
for general circulation, and to that end may be made payable 
to the bearer and transferable by delivery. The form of notes 
varying in amounts to suit the convenience or ability of the 
lender, has been found by experience a convenient form, and 
the one best calculated to secure the readiest acceptance and 
the largest loan. It has been the practice of the government 
to use notes of this character in raising loans and obtaining 
supplies from an early period in its history, their receipt by 
third parties being in all cases optional. 

In June, 1812, congress passed an act which provided for 
the issue of treasury notes, and authorized the secretary of the 
treasury, with the approbation of the president, "to borrow 
from time to time, not under par, such sums " as the presi- 
dent might think expedient, " on the credit of such notes." 

In February, 1813, congress passed another act for the issue 
of treasury notes, declaring '' that the amount of money bor- 
.rowed or obtained by virtue of the notes " issued under its 
second section should be a part of the money authorized to be 
borrowed under a previous act of the same session. There are 
numerous other acts of a similar character on our statute 
books. More than twenty, I believe, were passed previous to 
the legal tender act. 

In all of them the issue of the notes was authorized as a 
means of borrowing money, or of obtaining supplies, or pay- 
ing the debts of the United States, and in all of them the 
receipt of the notes by third parties was purely voluntary. 
Thus, in the first act, of June, 1812, the secretary of the treas- 
ury was authorized not only to borrow on the notes, but to issue 
such notes as the president might think expedient "in pay- 
ment of supplies or debts due by the United States to such 
public creditors or other persons " as might " choose to receive 
9uch notes in payment at par,^'* Similar provisions are found 
in all the acts except where the notes are authorized simply to 
take up previous loans. 



420 HOKOFOIJB8 AND THE FBOPLB. 

The issue of the notes for supplies purchased or services 
rendered at the request of the United States, is only giving 
their obligations for an indebtedness thus incurred; and tihe 
same power which authorizes the issue of notes for money 
must also authorize their issue for whatever is received as an 
equivalent for money. The result to the United States is the 
same as if the money was actually received for the notes and 
then paid out for the supplies or services. 

The notes issued under the act of Congress of Febmaiy 
26th, 1862, differ from the treasury notes authorized by the 
previous acts to which I have referred in the feet that they do 
not bear interest and do not designate on their face a period at 
which they shall be paid, features which may affect their value 
in the market but do not change their essential character. 
There cannot be, therefore, as already stated, any just objec- 
tion at this day to the issue of the notes, nor to their adapta- 
tion in form for general circulation. 

Nor can their be any objection to their being made receiv- 
able for dues to the United States. Their receivability in this 
respect is only the application to the demands of the govern- 
ment, and demands against it, of the just principle which is 
applied to the demands of individuals against each other, that 
cross-demands shall offset and satisfy each other to the extent 
of their respective amounts. No rights of third parties are in 
any respect affected by tlie application of the rule here, and 
the purchasing and borrowing powers of tlie notes are greatly 
increased by making them thus receivable for the public dues. 
The objection to the act does not lie in these features; it lies 
in the provision which declares that the notes shall be " a legal 
tender in payment of all debts, public and private," so far as 
that provision applies to private debts, and debts owing by the 
United States. 

In considering the validity and constitutionality of this 
provision, I shall in the first place confine myself to the pro- 
vision in its application to private debts. Afterwards I shall 
have something to say of the provision in its application to 
debts owing by the government. 

In the discussions upon the subject of legal tender the 



AFPEJSaXDL 4S1 

advocates of the measure do not agree as to the power in the 
oonstitution to which it shall be referred; some placing it 
upon the power to borrow money, some on the coining power, 
and some on what is termed a resulting power from the gen- 
eral purposes of the government; and these discussions have 
been accompanied by statements as to the effect of the meas- 
ure, and the consequences which must have followed had it 
been rejected, and which will now occur if its validity be not 
sustained, which rests upon no solid foundation, and are not 
calculated to aid the judgment in coming to a just conclusion. 

In what I have to say I shall endeavor to avoid any such 
general and loose statements, and shall direct myself to an 
inquiry into the nature of these powers to which the measure 
is referred, and the relation of the measure to them. 

Now if congress can, by its legislative declaration, make the 
notes of the United States a legal tender in payment of private 
debts — that is, can make them receivable against the Will of 
the creditor in satisfaction of debts due to him by third partis 
— ^its power in this respect is not derived from its power to bor- 
row money, under which the notes were issued. That power 
is not different in its nature or essential incidents from tiie 
power to borrow possessed by individuals, and is not to receive 
a larger definition. Nor is it different from the power often 
granted to public and private corporations. The grant, it is 
true, is usually accompanied in these latter c^ases with limita- 
tibtis as to the amount to be borrowed, and a designation of 
the objects to which the money shall be applied — limitations 
wliich in no respect affect the nature of the power. The 
tehnis " power to borrow money " have the same meaning in 
all these cases, and not one meaning when used by individuals, 
another when granted to corporations, and still a different one 
when possessed by congress. They mean only a power to 
contract for a loan of money upon considerations to be agreed 
between the parties. The amount of the loan, the time of 
repayment, the interest it shall bear, and the form in which 
the obligation shall be expressed are simply matters of arrange- 
tneiit betwcfen the parties. They concern no one else. It is 
no part or incident of a contract of tb^'s c^^aracter that the 



489 



MONOPOLnSB ASD THB FIDFL& 



lights or interests of third partieg, Btrangerg to the^miX^ 
shall be in any respect affeeted. The tran&actioo is completal 
when the lender has parted with his money, and the borroweir 
has given his promise of repayment at the time, and in the 
manner, and with the securities Htipnhited between them. 

As an inducement to the loan, and securitj for its repay* 
menty the borrower may of course pledge such property or 
revenues, and annex to his promises %uch nghu atid privileges 
as he may possess. His stipulations in this refipect are neces- 
sarily limited to his own property, rights, and privileges, and 
cannot extend to those of other persons. 

Now, whether a borrower — be the borrownir an individiml, 
a corporation, or the government— can annex to the t^M>Dd^ 
notes, or other evidences of debt given for tlie money borrowed, 
any quality by which they will serve as a means of eatisfyin^r 
the contracts of other parties, must necessarily depend iip^m 
the question whether the borrower possesses any right to in- 
terfere with such contracts, and determine how they shall bt 
satisfied. The right of the borrower in tihi^ respect rmt^ upon 
no different foundation than the right to interfere with any 
other property of third parties. And if it wil] not be con- 
tended, as I think I may assume that it will not be, that die 
borrower possesses any right, in order to make a loan, to inter- 
fere with the tangible and visible property of third parties, I 
do not perceive how it can be contended that he has any right 
to interfere with their property when it exists in the form of 
contracts. A large part of the property of every commercial 
people exists in that form, and the principle which excludes a 
stranger from meddling with another's property which is visi- 
ble and tangible, equally excludes him from meddling with it 
when existing in the form of contracts. 

That an individual or corporation borrowing, possesses no 
power to annex to his evidences of indebtedness any quality' 
by which the holder will be enabled to change his contracts 
with. third parties, strangers to the loan, is admitted; but it is 
contended that congress possesses such power, because, in addi- 
tion to the express power to borrow money, there is a clause 
in the constitution which authorizes congress to made all laws 



APFKNPIX. 4&3 

"necessary and proper" for the execution of the powers 
enumerated. This daase neither augments nor diminishes 
the expressly designated powers. It only states in terms what 
congress would equally have had the right to do without 
its insertion in the constitution. It is a general principle that 
a power to do a particular act includes the power to adopt all 
the ordinary and appropriate means for its execution. ^^ Had 
the constitution," says Hamilton, in the Federalist, speaking 
of this clause, " been silent on this head, there can be no doubt 
that all the particular powers requisite as a means of executing 
the general powers would have resulted to the government by 
unavoidable implication. No axiom is more clearly established 
in law or in reason, that whenever the end is required the 
means are authorized ; whenever a general power to do a 
thing is given, every particular power necessary for doing it is 
included. 

The subsidiary power existing without the clause in ques. 
tion, its insertion in the constitution was no doubt intended, 
as observed by Mr. Hamilton, to prevent "all cavilling refine- 
ments " in those who might thereafter feel a disposition to 
curtail and evade the legitimate authorities of the Union; and 
also, I may add, to indicate the true sphere and limits of the 
implied powers. 

But though the subsidiary power would have existed without 
this clause, there would have been the same perpetually recur- 
ring question as now, as to what laws are necessary and proper 
for the execution of the expressly enumerated powers. 

The particular clause in question has at difierent times 
undergone elaborate discussions in congress, in cabinets, and 
in the courts. Its meaning was much debated in the first 
congress upon the proposition to incorporate a national bank, 
and afterwards in the cabinet of Washington, when that 
measure was presented for his approval. Mr. Jefferson, then 
secretary of state, and Mr. Hamilton, then secretary of tiie 
treasury, differed widely in their construction of the clause, 
and each gave his views in an elaborate opinion. Mr. Jeffer- 
son held that the word " necessary," restricted the power of 
congress to the use of those means, without which the grant 



424 MONOPOLIES AND THE PEOPLE. 

would be nugatory, thus making necessary equivalent to 
indispensable. 

Mr. Hamilton favored a more liberal, and in my judgment, 
a more just interpretation, and contended that the terms 
^'necessary and proper," meant no more than that the meas- 
ures adopted must have an obvious relation as a means to the 
end intended. "If the end," he said, "be clearly compre- 
hended within any of the specilBied powers, and if the measure 
have an obvious relation to that end, and is not forbidden by 
any particular provision of the constitution, it may aafely be 
deemed to come within the compass of the national authority." 
" Theste is also," he added, " this further criterion which may 
materially assist the decision: Does the proposed measure 
abridge a preexisting right of any state, or of any individual i 
If it does not, there is a strong presumption in favor of its 
constitutionality; and slighter relations to any declared object 
may be permitted to turn the scale." From the criterion 
thus indicated, it would seem that the distinguished statesman 
was of opinion that a measure which did interfere with a 
preexisting right of a state or an individual would not be 
constitutional. 

The interpretation given by Mr. Hamilton was substantially 
followed by Chief Justice Marshall, in McCvlloch v. TK6 
State of Maryland, when, speaking for the court, he said that 
if the end to be accomplished by the legislation of congress be 
legitimate, and within the scope of the constitution, "all the 
means which are appropriate, which are plainly adapted to 
that end, and which are uot prohibited, but are consistent with 
the letter and spirit of the constitution, are constitutional." 
The chief justice did not, it is true, in terras declare that legis- 
lation which is not thus appropriate, and plainly adapted to a 
lawful end, is unconstitutional, but such is the plain import 
of the argument advanced by him; and that conclusion must 
also follow from the principle that, when legislation of a par- 
ticular character is specially authorized, the opposite of such 
legislation is inhibited. 

Tested by the rule given by Mr. Hamilton, or by the rule 
thus laid down by this court through Mr. Chief Justice Mar- 



496 

fihall, the annexiiig of a qnalily to the promises of the govern- 
ment for money borrowed, which will enable the holder to nse 
them as a means of satisfying the demands of third parties, 
cannot be sustained as the exercise of an appropriate means 
of borrowing. That is only appropriate which has some 
relation of fitness to an end. Borrowing, as already stated, is 
a transaction by which, on one side, the lender parts with his 
money, and on the other the borrower agrees to repay it in 
such form and at snch time as may be stipulated. Though 
not a necessary part of the contract of borrowing, it is usual 
for the borrower to oflfer securities for the repayment of the 
loan. The fitness which would render a means appropriate to 
this transaction thus considered, must have respect to the 
terms which are essential to the contract, or to the securities 
which the borrower may furnish as an inducement to the 
loan. The quality of legal tender does not touch the terms 
of the contract of borrowing, nor does it stand as a security 
for the loan. A security supposes some right or interest in 
the thing pledged, which is subject to the disposition of the 
borrower. 

There has been much confusion on this subject from a 
failure to distinguish between the adaptation of particular^ 
means to an end and the effect, or supposed effect, of those, 
means in producing results desired by the government. The 
argument is stated thus: the object of borrowing is to raise 
funds; the annexing of the quality of legal tender to the notes 
of the government induces parties the more readily to loan 
upon them; the result desired by the government — the acqui- 
sition of funds — ^is thus accomplished; therefore, the annexing 
of the quality of legal tender is an appropriate means to the 
execution of the power to borrow. But it is evident that the 
same reasoning would justify, as appropriate means to the 
execution of this power, any measures which woul^ result in 
obtaining the required funds. The annexing of a provision 
by which the notes of the government should serve as a free 
ticket in the public conveyan< of the country, or for ingress 
into places of public amusemi t, or which would entitle the 
holder to a percentage out t avenues of private corpora- 



426 MOKOFOLIBB AND THE FBOFLB. 

tions, or exempt his entire property, as wed as die notes 
themselves, from state and municipal taxation, would jfroAoee 
a ready acceptance of the notes. But the advocate of the 
most liberal construction would hardly pretend that these 
measures, or similar measures touching the property of third 
parties would be appropriate as a means to the execution of 
the power to borrow. Indeed, there is no invasion by govern- 
ment of the rights of third parties which might not thus be 
sanctioned upon the pretence that its allowance to the bolder 
of the notes would lead to their ready acceptance and prodnce 
the desired loan. 

The actual effect of the quality of l^al tender in inducing 
parties to receive them was necessarily limited to the amount 
required by existing debtors, who did not scruple to discharge 
with them their preexisting liabilities. For moneys desired 
from other parties, or supplies required for the use of the army 
or navy, the provision added nothing to the value of the notes. 
Their borrowing power or purchasing power depended, by a 
general and a universal law of currency, not upon the legal 
tender clause, but upon the confidence which the partiee 
receiving the notes had in their ultimate payment Their 
exchangeable value was determined by this confidence, and 
every person dealing in them advanced his money and regulated 
his charges accordingly. 

The inability of mere legislation to control this universal 
law of currency is strikingly illustrated by the history of the 
bills of credit issued by the Continental congress during our 
Eevolutionary war. From June, 1775, to March, 1780, these 
bills amounted to over $300,000,000. Depreciation followed 
as a natural consequence, commencing in 1777, when the issues 
only equalled $14,000,000. Previous to this time, in January, 
1776, when the issues were only $5,000,000, congress had, by 
resolution, declared that if any person should be " so lost to all 
virtue and regard to his country " as to refuse to receive the 
bills in pajTnent, he should, on conviction thereof by the com- 
niittee of the city, county, or district, or, in case of appeal from 
their decision, by the assembly, convention, council, or com- 
mittee of safety pf the colony where he resided, be "deemed, 



APPENDIX. 427 

published, and treated as an enemy of his country, and pre- 
cluded from all trade or intercourse with the inhabitants" 
of the colonies. 

And in January, 1777, when as yet the issues were only 
$14,000,000, congress passed this remarkable resolution : 

" Resolved^ That all bills of credit emitted by authority of 
congress ought to pass current in all payments, trade, and 
dealings in these states, and be deemed in value equal to the 
same nominal sums in Spanish milled dollars, and that whoso- 
ever shall ofier, ask, or receive more in the said bills for any 
gold or silver coins, bullion, or any other species of money 
whatsoever, than the nominal sum or amount thereof in 
Spanish milled dollars, or more in the said bills for any lands, 
houses, goods, or commodities whatsoever than the same could 
be purchased at of the same person or persons in gold, silver, 
or any other species of money whatsoever, or shall offer to 
sell any goods or commodities for gold or silver coins or any 
other species of money whatsoever and refuse to sell the same 
for the said continental bills, every such person ought to be 
deemed an enemy to the liberty of these United States and to 
forfeit the value of the money so exchanged, or house, land, or 
commodity so sold or offered for sale. And it is recommended 
to the legislatures of the respective states to enact laws inflict- 
ing such forfeitures and other penalties on offenders as afore- 
said as will prevent such pernicious practices. That it be 
recommended to the legislatures of the United States to pass 
laws to make the bills of credit issued by the congress a lawful 
tender in payments of public and private debts, and a refusal 
thereof an extinguishment of such debts; that debts payable 
in sterling money be discharged with continental dollars at 
the rate of 4*. 6^. sterling per dollar, and that in discharge 
of all other debts and contracts continental dollars pass at the 
rate fixed by the respective states for the value of Spanish 
milled dollars." 

The several states promptly responded to the recommenda- 
tions of congress, and made the bills a legal tender for debts, 
and the refusal to receive them an extinguishment of the debt. 

Congress also issued, in September, 1 "'^<^ > ^V>« addressed 



MONOPOLIES AND THE FBOFLB. 

to the people, on the ^bject, in which they ahowed thai the 
United States would be able to redeem the billfl^ and tfaoj 
repelled with indignation the suggestion that there ooold be 
any violation of the public fS^th. "The pride of America," 
said the address, " revolts from the idea; her dtisens know for 
what purposes these emissions were made, and have repeatedly 
plighted tlieir faith for the redemption of them; they are to 
be found in every man's possession, and every man is inter- 
ested in their being redeemed; they must, therefore, entertain 
a high opinion of American creduHly who suppose the people 
capable of believing, on due reflection, that all America will, 
against the faith, the honor, and the interest of all America, 
be ever prevailed upon to countenance, support, or permit so 
ruinous, so disgraceAil a measure. We are convinced that the 
efforts and arts of our enemies will not be wanting to draw us 
into this humiliating and contemptible situation. Impelled by 
malice, and the suggestions of chagrin and disappointment at 
not being able to bend our necks to the yoke, they will endeavor 
to force or seduce us to commit this unpardonable sin in order 
to subject us to the punishment due to it, and that we may 
thenceforth be a reproach and a by-word among the nations. 
Apprised of these consequences, knowing the value of national 
character, and impressed with a due sense of the immutable 
laws of justice and lienor, it is impossible that America should 
think without horror of such an execrable deed." 

Yet in spite of the noble sentiments contained in this ad- 
dress, which bears the honored name of John Jay, then presi- 
dent of congress, and afterwards the first chief justice of this 
court, and in spit^j of legal tender provisions and harsh penal 
statutes, the universal law of currency prevailed. Depreciation 
followed until it became so great that the very idea of redemp- 
tion at par was abandoned. 

Congress then proposed to take up the bills by issuing new 
bills on the credit of the several states, guaranteed by the 
United States, not exceeding one-twentieth of the amount of 
the old issue, the new bills to draw interest, and he redeemable 
in six years. But the scheme failed, and the bills became, 
during 1780, of so little value that they ceased to circulate and 



APFKNDIX. 429 

^quietly died/' says the luBtorian of the period, ^4n the hands 
of their poBsetisorB." 

And it is within the memory of all of ns that daring the 
late rebellion the notes of the United States issued nnder the 
legal tender act rose in value in the market as the successes of 
our arms gave evidence of an early termination of the war, 
and that they fell in value with every triumph of the Confed- 
erate forces. No legislation of congress declaring these notes 
to be money instead of representatives of money or credit 
could alter this result one jot or tittle. Men measured their 
value, not by congressional declaration, wliich could not alter 
the nature of things, but by the confidence reposed in their 
ultimate payment 

Without the legal tender provision the notes would have 
circulated equally well and answered all the purposes of gov- 
ernment — the only direct benefit resulting from that provisionr 
arising, as already stated, from the ability it conferred upon 
unscrupulous debtors to discharge with them previous obliga- 
tions. The notes of state banks circulated without possessing 
that quality, and supplied a currency for the people just so long 
as confidence in the ability of the banks to redeem the notes 
continued. The notes issued by the national bank associations 
during the war under the authority of congress, amounting to 
$300,000,000, which were never made a legal tender, circulated 
equally well with the notes of the United States. Neither 
their utility nor their circulation was diminished in any degree 
by the absence of a legal tender quality. They rose and fell 
in the market under the same influences, and precisely to the 
same extent as the notes of the United States, which possessed 
this quality. 

It is foreign, however, to my argument to discuss the utility 
of the legal tender clause. The utility of a measure is not the 
subject of judicial cognizance, nor, as already intimated, the 
test of its constitutionality. But the relation of the measure 
as a means to an end authorized by the constitution, is a sub- 
ject of such cognizance, and the test of its constitutionality, 
when it is not prohibited by any specific provision of that 
instrument, and is consistent with its letter and spirit. <<The 



480 MONOPOLIES AND THE FBOFLB ^ 

degree," said Hamilton, ^^ in which a measure is neoeaaaiy can 
never be a test of the legal right to adopt it. That muBt be a 
matter of opinion, and can only be a test of expediency. The 
relation between the means and the end, between the nature of 
a means employed toward the execution of the power and the 
object of that power, must be the criterion of unconstitation- 
ality; not the more or less of necessity or utility." 

If this were not so, if congress could not only exercise, as it 
undoubtedly may, imrestricted liberty of choice among the 
means which are appropriate, and plainly adapted to the exe- 
cution of an express power, but could also judge, without its 
conclusions being subject to question in cases involving private 
rights, what means are thus appropriate and adapted, our gov- 
ernment would be, not what it was intended to be, one of lim- 
;ited, but one of unlimited powers. 

Of course congress must inquire in the first instance, and 
determine for itself, not only the expediency, but the fitness to 
the end intended, of every measure adopted by its legislation. 
But the power of this tribunal to revise these determinations 
in cases involving private rights has been uniformly asserted, 
since the formation of the constitution to this day, by the 
ablest statesmen and jurists of the country. 

I have thus dwelt at length upon the clause of the constitu- 
tion investing congress with the power to borrow money on 
the credit of the United States, because it is under that power 
that the notes of the United States were issued, and it is upon 
the supposed enhanced value which the quality of legal tender 
gives to such notes, as the means of borrowing, that the valid- 
ity and constitutionality of the provision annexing this quality 
are founded. It is true that in the arguments of counsel, and 
in the several opinions of difierent state courts, to which our 
attention has been called, and in the dissenting opinion in Hep- 
bum V. Griswold^ reference is also made to other powers pos- 
sessed by congress, particularly to declare war, to suppress 
insurrection, to raise and support armies, and to provide and 
maintain a navy — all of which were called into exercise and 
severely taxed at the time the legal tender act was passed. But 
it ia evident that the notes have no relation to these powers, 



AFFBNDIX. 431 

or to any other powers of oongreBs, except as they fnmiBh a 
oonvenient means for raising money for their execution. The 
existence of the war only increased the urgency of the govern- 
ment for funds. It did not add to its powers to raise such 
funds, or change, in any respect, the nature of those powers or 
the transactions which they authorized. If the power to en- 
graft the qualily of legal tender upon the notes existed at all 
with congress, the occasion, the extent, and the purpose of its 
exercise were mere matters of legislative discretion ; and the 
power may be equally exerted when a loan is made to meet 
the ordinary expenses of government in time of peace, as when 
vast sums are needed to raise armies and provide navies in 
time of war. The wants of the government can never be the 
measure of its poic^s. 

The constitution has specifically designated the means by 
which funds can be raised for the uses of the government, 
either in war or peace. These are taxation, borrowing, coining, 
and the sale of its public property. Congress is empowered 
to levy and collect taxes, duties, imposts, and excises, to any 
extent which the public necessities may require. Its power to 
borrow is equally unlimited. It can convert any bullion it 
may possess into coin, apd it can dispose of the public lands 
and other property of the United States, or any part of such 
property. The designation of these means exhausts the pow- 
ers of congress on the subject of raising money. The designa- 
tion of the means is a negation of all others, for the designation 
would be unnecessary and absurd if the use of any and all 
means were permissible without it. These means exclude a 
resort to forced loans, and to any conipulsory interference with 
the property of third persons, except by regular taxation in one 
of the forms mentioned. 

But this is not all. The power to " coin money " is, in my 
judgment, inconsistent with and repugnant to the existence of 
a power to make anything but coin a legal tender. To coin 
money is to mould metallic substances having intrinsic value 
into certain forms convenient for commerce, and to impress 
them with the stamp of the government indicating their value. 
Coins are pieces of metal of definite weight and value, thus 



488 MONOFOLUQS AND THE PKOPLK. 

stamped by n&tional anthorily. Such is the natural import of 
the terms, '^ to coin money " and ^^ coin ; " and if there were 
any doubt that this is their meaning in the constitation, it 
would be removed by the language which immediately follows 
the grai;^t of the ^^ power to coin," authorizing congreBB to reg- 
ulate the value of the money thus coined, and also ^ of foreign 
coin," and by the distinction made in other clauses between coin 
and the obligations of the general government and of the 
several states. 

Tlie power of regulation conferred is the power to determine 
the weight and purity of the several coins struck, and their 
consequent relation to the monetary unit which might be estab- 
lished by the authority of the government — a power which can 
be exercised with reference to the metallic coins of foreign 
countries, but which is incapable of execution with reference 
to their obligations or securities. 

Then, in the clause of the constitution immediately follow- 
ing authorizing congress ^' to provide for the punishment of 
counterfeiting the securities and current coin of the United 
States, '' a distinction between the obligations and coins of the 
general government is clearly made. And in the tenth section, 
which forbids the states to '* coin money, emit bills of credit, 
and make anything but gold and silver coin a tender in pay- 
ment of debts/' a like distinction is made between coin and 
the obligiitions of the several states. The terms gold and silver, 
as applied to the coin, exclude the possibility of any other 
conclusion. 

Now, money, in the true sense of the term, is not only a 
medium of exchange, but it is a standard of value by which 
all other values are measured. Blackstone says — and Story 
repeats his language — '' Money is a universal medium or com- 
mon standard, by a comparison with which the value of all 
merchandise may be ascertained, or it is a sign which repre- 
sents the respective values of all commodities." Money being 
such standard, its coins or pieces are necessarily a legal tender 
to the amount of their respective values, for all contracts or 
judgments payable in money, without any legislative enact- 
ment to make them so. The provisions in the different coin- 



AFFE2n>nL 483 

age acts, that the coins to be struck shall be snch l^al tender, 
are merely declaratory of their effect when offered in payment, 
and are not essential to give them that character. 

The power to coin money is therefore a power to fiibricate 
oerins out of metal as money, and thus make them a legal ten- 
der for their declared values, as indicated by their stamp. If 
this be the true import and meaning of the language used, it 
is difficult to see how congress can make the paper of the gov- 
ernment a legal tender. When the constitution says that 
congress shall have the power to make metallic coins a legal 
tender, it declares in effect that it shall make nothing else such 
tender. The affirmative grant is here a negative of all other 
power over the subject. 

Besides this, there cannot well be two different standards of 
value, and consequently two kinds of legal tender for the dis- 
charge of obligations arising from the same transactions. The 
standard or tender of the lower actual value would in such 
case inevitably exclude and supersede the other, for no one 
would use the standard or tender of higher value when his 
purpose could be equally well accomplished by the use of the 
other. A practical illustration of the truth of this principle 
we have all seen in the effect upon coin of the act of congress 
making the notes of the Unijed States a legal tender. It drove 
coin from general circulation, and made it, like bullion, the 
subject of sale and barter in the market. 

The inhibition upon the states to coin money, and yet to 
make anything but gold and silver coin a tender in payment 
of debts, must be read in connection with the grant of the 
coinage power to congress. The two provisions taken together 
indicate beyond question that the coins which the national 
government was to fabricate, and the foreign coins, the valua- 
tion of which it was to regulate, were to consist principally, if 
not entirely, of gold and silver. 

The framers of the constitution were considering the subject 
of money to be used throughout the entire union when these 
provisions were inserted, and it is plain that they intended 
by them that metallic coins fabricated by the national govern- 
ment, or adopted from abroad bv it** anthority, composed of 
28 



484 MOKOFOUBS AND THB FBOFLB. 

the precious metals, should every where be the standard, and 
the only standard, of value by which exchanges oonid be regu- 
lated and payments made. 

At that time gold and silver, moulded into forms oonyenie&t 
for use and stamped with their value by public authority, c5ii- 
stituted,- with the exception of pieces of copper for small 
values, the money of the entire civilized world. Indeed these 
metals, divided up and thus stamped, always have constituted 
money with all people having any civilization, from the earliest 
periods in the history of the world down to the present time. 
It was with "four hundred shekels of silver, current money 
with the merchant," that Abraham bought the field of Mach- 
pelah, nearly four thousand years ago. This adoption of the 
precious metals as the subject of coinage — the material of money 
by all peoples in all ages of the world — has not been the result 
of any vagaries of fancy, but is attributable to the fact that 
they, of all metals, alone possess the properties which are essen- 
tial to a circulating medium of uniform value. 

"The circulating medium of a commercial community," 
says Mr. Webster, " must be that which is also the drcalating 
medium of other commercial communities, or must be capable 
of being converted into that medium without loss. It must 
also be able not only to pass in payments and receipts among 
individuals of the same society and nation, but to adjust and 
discharge the balance of exchanges between different nations. 
It must be something which has a value abroad as well as at 
home, by which foreign, as well as domestic debts can be satis- 
fied. The precious metals alone answer these purposes. They 
alone, therefore are money, and whatever else is to perform the 
functions of money must be their representative and capable 
of being turned into them at will. So long as bank paper 
retains this quality it is a substitute for money ; divested of 
this, nothing can give it that character." 

The statesmen who firamed the constitution understood this 
principle as well as it is understood in our day. They had 
seen in the experience of the revolutionary period the demora- 
lizing tendency, the cruel injustice, and the intolerable oppres- 
sion of a paper currency not convertible on demand into money, 



AFPENDIX. . 485 

and forced into circulation by legal tender provisions and penal 
enactments. When they, therefore, were constructing a gov- 
eimment for a country which they could not fail to see was 
destined to be a mighty empire, and have commercial relations 
with all nations, a government which they believed was to 
endure for ages, they determined to recognize in the funda- 
mental law, as a standard of value, that which ever has been, 
and always must be, recognized by the world as the true stand- 
ard, and thus facilitate commerce, protect industry, establish 
justice, and prevent the possibility of a recurrence of the evils 
which they had experienced and the perpetration of the injus- 
tice which they had witnessed. "We all know," says Mr. 
Webster, ** that the establishment of a sound and uniform cur- 
rency was one of the greatest ends contemplated in the adoption 
of the present constitution. If we could now fully explore all 
the motives of those who framed and those who supported that 
constitution, perhaps we should hardly find a more powerful 
one than this." 

And how the framers of the constitution endeavored to 
establish this " sound and uniform currency " we have already 
seen in the clauses which they adopted providing for a cur- 
rency of gold and silver coin. Their determination to sanction 
only a metallic currency is further evidence from the debates 
in the convention upon the proposition to authorize congress 
to emit bills on the credit on the United States. By bills of 
credit, as the terms were then understood, were meant paper 
issues, intended to circulate through the community for its 
ordinary purposes as money, bearing upon their face the 
promise of the government to pay the sums specified thereon 
at a future day. The original draft contained a clause giving 
congress power to " borrow money and emit bills on the credit 
of the United States," and when the clause came up for con- 
sideration, Mr. Morris moved to strike out the words " and 
emit bills on the credit of the United States," observing that 
"if the United States had credit, such bills would be unnooet- 
sary; if they had not, unjust and useless." Mr. Mmii^on 
inquired whether it would not be " sufficient to prohibit the 
making them a legal tender." "This will remove," heaaid. 



436 MONOFOtlSB AND THE PROFIT 

^ the temptation to emit them with nnjnst views, and promiB. 
017 notes in that shape may in some emergencies be best" 
lb*. Morris replied that striking out the words wonld still 
leave room for " notes of a responsible minister," which would 
do "all the good' without the mischief." Mr. Gorham was for 
striking out the words without inserting any prohibition. If 
the words stood, he said they might " suggest and lead to the 
measure," and that the power, so far as it was necessary or 
safe, was "involved in that of borrowing." Mr. Madison said 
he was unwilling " to tie the hands of congress," and thought 
congress " would not have the power unless it were expressed" 
Mr. Ellsworth thought it " a favorable moment to shut and 
bar the door against paper money." "The mischie&," he 
said, " of the various experiments which had been made were 
now fresh in the public mind and had excited the disgust of 
all the respectable part of America. By withholding the power 
from the new government, more friends of influence would be 
gained to it than by almost anything else. Paper money can 
in no case be necessary. Give the government credit, and 
other resources will offer. The power may do harm, never 
good." Mr. Wilson thought that " it would have a most salu- 
tary influence on the credit of the United States to remove the 
possibility of pa])er money." "This expedient," he said, 
" can never succeed whilst its mischiefs are remembered, and 
as long as it can be resorted to it will be a bar to other 
resources." Mr. Butler was urgent for disarming the^vem- 
ment of such a power, and remarked '' that paper was a legal 
tender in no country in Europe." Mr. Mason replied that 
if there was no example in Europe there was none in which 
the government was restrained on this head, and he was 
averse " to tying up the hands of the legislature altogether." 
Mr. Langdon preferred to reject the whole plan than retain 
the words. 

Of those who participated in the debates, only one, Mr. 
Mercer, expressed an opinion favorable to paper money, and none 
suggested that if congress were allowed to issue the bills their 
acceptance should be compulsory — that is, that they should be 
made a legal tender. But the words were stricken out by 



AFPKNBIX. 487 

\ 

a vote of nine states to two. Virginia voted for tbe motioni 
and Mr. Madison has appended a note to the debates, stating 
that her vote was^ occasioned by his acqniescencei and that he 
^ became satisfied that striking ont the words wonld not dis- 
able the government from the use of public notes, as far as 
they could be safe and proper; and would only cut off the pretext 
for a p(iper currency and particularly for making the bills a 
t&nder either for public or private debts." 

K anything is manifest from these debates it is that the 
members of the conventiom intended to withhold from congress 
the power to issue bills to circulate as money — that is, to be 
receivable in compulsory payment, or, in other words, having 
the quality of legal tender — and that the express power to issue 
the bills was denied, under an apprehension that if granted it 
would give a pretext to congress, under the idea of declaring 
their effect, to annex to them that quality. The issue of notes 
simply as a means of borrowing money, which of course would 
leave them to be received at the option of parties, does not 
appear to have been seriously questioned. The circulation of 
notes thus issued as a voluntary currency and their receipt in 
that character in payment of taxes, duties, and other public 
expenses, was not subject to the objections urged. 

I am aware of the rule that the opinions and intentions of 
individual members of the convention, as expressed in its 
debates and proceedings, are not to control the construction of 
the plain language of the constitution or narrow down the 
powers which that instrument confers. Members, it is said, 
who did not participate in the debate may have entertained 
different views from those expressed. The several state con- 
ventions to which the constitution was submitted may have 
differed widely from each other and from its framers in their 
interpretation of its clauses. We all know that opposite opin- 
ions on many points were expressed in the conventions, and 
conflicting reasons were urged both for the adoption and the 
rejection of that instrument. All this is very true, but it does 
not apply in the present case, for on the subject now under 
consideration there was everywhere, in the several state con- 
ventions and in the discussions before the people, an entire 



t 

miifbTmity of opinion, bo &r as we Intve airf iMdid ef its 
acpraBBion, and that tioncnited with the ifttentidii of tiie eon- 
"Mition, as disdoaed by its debates, that 'the eooBtitatioii 
withhdd from congress all power to issne biOs tO'ditMile as 
money, meaning by that bills made reoeivlible is domfldKny 
payment, or, in other words, having the qnalitj of legal tender. 
Every one appears to have understood that the power of making 
paper issues a legal tender, by congress or l^ the sttttoSi was 
absolutely and forever prohibited. 

Mr. Lnther Martin, a member of the convention, in his 
speech before the Maryland legislature, as reported in hia letter 
to that body, states tibe arguments urged against depriving 
congress of the power to emit bills of credit, and thea says 
that a ^^ majority of the convention being wise beyond eveiy 
event, and being willing to risk any political evil ratiier Ihaa 
-admit the idea of a paper emission in any possible case, rrfbsed 
to trust this authority to a government to which they were 
lavishing the most unlimited powers of taution and to ihe meivj 
of which they were willing blindly to trust the liberty and 
property of the citizens of ev^y state in the Union, and Mdjr 
erased thatclcmse from the eystemy 

Not only was this construction given to the constitution by 
its framers and the people in their discussions at the time it 
was pending before them, but until the passage of the act of 
1863, a period of nearly three-quarters of a century, the sound- 
ness of this construction was never called in question by any 
legislation of congress or the opinion of any judicial tribunal. 
Numerous acts, as already stated, were passed during this 
period, authorizing the issue of notes for the purpose of raising 
funds or obtaining supplies, but in none of them was the 
acceptance of the notes made compulsory. Only one instance 
have I been able to find in the history of congressional pro- 
ceedings where it was even suggested that it was within the 
competency of congress to annex to the notes the quality of 
legal tender, and this occurred in 1814. The government was 
then greatly embarrassed from the want of funds to continue 
t ir existing with Great Britain, and a member from 

^ *gia introduced into the house of representatives several 



▲PFBNDIZ. 489 

reBolntions directing an inquiry into the expediency of author- 
izing the secretary of the treasury to issue notes convenient 
for circulation and making provision for the purchase of sup- 
plies in each state. Among the resolutions was one declaring 
that the notes to be issued should be a legal tender for debts 
due or subsequently becoming due between citizens of the 
United States and between citizens and foreigners. The house 
agreed to consider all the resolutions but the one containing 
the legal tender provision. That it refused to consider by a 
vote of more than two to one. 

As until the act of 1862 there was no legislation making the 
acceptance of notes issued on the credit of the United States 
compulsory, the construction of the clause of the constitution 
containing the grant of the coinage power never came directly 
before this court for consideration, and the attention of the 
court was only incidentally drawn to it. But whenever the 
court spoke on the subject, even incidentally, its voice was in 
entire harmony with that of the convention. 

Thus, in Gwvn v. Breedlove^ where a marshal of Mississippi, 
commanded to collect a certain amount of dollars on execu- 
tion, received the amount in bank notes, it was held that he 
was liable to the plaintiflF in gold and silver. " By the consti- 
tution of the United States," said the court, " gold or silver 
coin made current by law can only be tendered in payment of 
debts." 

And in the case of the United States v. MaHgold^ where 
the question arose whether congress had power to enact cer- 
tain provisions of law for the punishment of persons bringing 
into the United States counterfeit coin with intent to pass it, 
the courf said: These provisions " appertain to the execution 
of an important trust invested by the constitution, and to the 
obligation to fulfill that tnist on the part of the government, 
namely, the trust and the duty of creating and maintaining a 
uniform and pure metallic standard of value throughout the 
Union. The power of coining money and of regulating its 
value was delegated to congress by the constitution for the 
very purpose, as assigned by the framers of that instrument, 
of creating and preserving the uniformity and purity of such 



APPENDIX. 441 

but gold and silver. Most unqnestionabiy there is no legal 
tender, and there can be no legal tender in this country, under 
the authority of this government or any other, but gold and 
silver — either the coinage of our own mints or foreign coins, 
at rates regulated by congress. This is a constitutional prin- 
ciple, perlectly plain, and of the very highest importance. 
The states are expressly prohibited from making anything but 
gold and silver a tender in payment of debts, and, although no 
such express prohibition is applied to congress, yet, as con- 
gress has no power granted to it in this respect but to coin 
money, and to regulate the value of foreign coins, it clearly 
has no power to substitute paper, or anything else, for coin, as 
a tender in payment of debts and in discharge of contracts. 
Congress has exercised this power fully in both its branches. 
It has coined money, and still coins it; it has regulated the 
value of foreign coins, and still regulates their value. The 
legal tender, therefore, the constitutional standard of value, is 
establishsd and cannot be overthrown. To overthrow it would 
shake the whole system." 

If, now, we consider the history of the times when the con- 
stitution was adopted; the intentions of the framers of that 
instrument, as shown in their debates; the contemporaneous 
exposition of the coinage power in the state conventions 
assembled to consider the constitution, and in the public dis- 
cussions before the people; the natural meaning of the terms 
used; the nature of the constitution itself as creating a gov- 
ernment of enumerated powers; the legislative exposition of 
nearly three-quarters of a century; the opinions of judicial 
tribunals, and the recorded utterances of statesmen, jurists, 
and commentators, it would seem impossible to doubt that the 
only standard of value authorized by the constitution was to 
c'^^TiP^i'^t iif in**uiUic coins struck or regulated by the direction 
of congreiift, and that tlie power to establish any other standard 

^WBA dt^oled by that iustrti] t. 

Tl\iiri* tiri? otlK*r miiM. io besides those I have stated, 

[whic'h are er|ually convin [ist the constitutionality of 

ll)r 1'v.rriHeikder bto^^ le act of February 25th, 1862, 

ts and debts by the govern- 




10 MozrofQUtt jam- WE fwxfijl 

a standard of Talue, and on account of the impossibility which 
was foreseen of otherwise preventing the inecjualities and the 
confusion necessarily incident to different views of policy, 
which in diflerent communities would be brought to bear on 
this subject. I5ie power to coin money being tho& giveai to 
coGgresBj founded on public necessity, it must carry with it 
the correlative power of protecting the creature and object of 
that power." 

It is difficult to percjeive how the trust and duty here desig- 
nated, of ^^ creating and maintaining a uniform and metallic 
standaid of value throughout the TTnion/' is dischaiged, when 
another standard of lower value and fluctuating character is 
authorized by law, which neoeBsarily operates to drive the flnt 
ftpm circulation. 

In addition to all the weight of opinion I have mentioiied 
we have, to the same purport, firom the adopticm of ih» consti- 
tution up to the passage of the act of 1862, the united testi- 
mony of the leading statesmen and jurists of the conntty. 
Of all the men who, during that period, participated with any 
distinction in the councils of the nation, not one can be named 
who ever asserted any different power in congress than what 
I have mentioned. As observed by the chief justice, states- 
man who disagreed widely on other points agreed on this. 

Mr. "Webster, who has always been regarded by a large por- 
tion of his countrymen as one of the ablest and most coilight- 
ened expounders of the constitution, did not seem to think 
there was any doubt on the subject, although he belonged to 
the class who advocated the largest exercise of powers by the 
general government. From his first entrance into public life, 
in 1812, he gave great considerations to the subject of the cur- 
rency, and in an elaborate speech in the senate, in 1836, he 
said: "Currency, in a large and perhaps just sense, includes 
not only gold and silver and bank bills, but bills of exchange 
also. It may include all that adjusts, exchanges, and settles 
balances in the operations of trade and business; but if we 
understand by currency the legal money of the country, and 
that which constitutes a lawful tender for debts, and is the 
statute measure of value, then undoubtedly nothing is included 



APPENDIX. 441 

bnt gold and silver. Most unquestionably there is no legal 
tender, and there can be no legal tender in this country, under 
the authority of this government or any other, but gold and 
silver — either the coinage of our own mints or foreign coins^ 
at rates regulated by congress. This is a constitutional prin- 
ciple, perlectly plain, and of the very highest importance. 
The states are expressly prohibited from making anything but 
gold and silver a tender in payment of debts, and, although no 
such express prohibition is applied to congress, yet, as con- 
gress has no power granted to it in this respect but to coin 
money, and to regulate the value of foreign coins, it clearly 
has no power to substitute paper, or anything else, for coin, as 
a tender in payment of debts and in discharge of contracts. 
Congress has exercised this power fully in both its branches. 
It has coined money, and still coins it; it has regulated the 
value of foreign coins, and still regulates their value. The 
legal tender, therefore, the constitutional standard of value, is 
establishsd and cannot be overthrown. To overthrow it would 
shake the whole system." 

If, now, we consider the history of the times when the con- 
stitution was adopted; the intentions of the framers of that 
instrument, as shown in their debates; the contemporaneous 
exposition of the coinage power in the state conventions 
assembled to consider the constitution, and in the public dis- 
cussions before the people; the natural meaning of the terms 
used; the nature of the constitution itself as creating a gov- 
ernment of enumerated powers; the legislative expositioh of 
nearly three-quarters of a century; the opinions of judicial 
tribunals, and the recorded utterances of statesmen, jurists, 
and commentators, it would seem impossible to doubt that the 
only standard of value authorized hj the constitution was to 
consist of metallic coins struck or regulated by the direction 
of congress, and that the power to establish any other standard 
was denied by that instrument. 

There are other considerations besides those I have stated, 
which are equally convincing against the constitutionality of 
the legal tender provision of the act of February 25th, 1862, 
80 far as it applies to private debts and debts the govern- 



4iS iioavoroLni asd tbx novuL 



vait eontneled previow to its piwigau That pmrtkim 
opormtes diroeayto impttr Ibe obHgatkm of mdi «oiiii»ete. 
la die diMenti]^ opinioiiyin fheeMBeot SqgHwn r.GrkmcH 
tfiis IB admitted to be its opetmtioii, and tba poaitioii is takai 
tihali while die ecmatitaticHi fcvUdi die state to paaa mth hmBf 
it doea not forbid oragiees to do this, and die poivw to eatah- 
Hah a nniform sjatem of bankmptcgr, idiidi is eoEpremfy eon- 
farad, is mentioned in aapport of the poaition. In aome of 
the opinions of the state eonrtSi to wlikh onr attentkm hss 
been directed, it is denied that the provision in question 
impairs the obligation of previous contraelSi it being aasoitod 
diat a contract to pay money is satisfied, aoooiding to iti 
^ meaning, by the payment of diat which is money jAobl die 
payment is made, and that if the law does not interfiara widi 
diis mode of satisfiMstion, it does not impair the obUgattcn of 
the contract This position is troe so long as the term money 
lepresents the same thing in both cases or their actoal equiva- 
lents, bnt it is not true when the term has diffiBrent meanii^^a. 
Money is a -generic term, and contracts foir money are not 
made widiont a specification of die coins or denominationa of 
money, and the number of them intended, as eagles, doDari, 
or wnts; and it will not be pretended that a contract for a 
specified number of eagles can be satisfied by a delivery of an 
equal number of dollars, although both eagles and dollars are 
money; nor would it thus be contended, though at the time 
the contract matured the legislature had determined to call 
dollars eagles. Contracts are made for things, not names or 
sounds, and the obligation of a contract arises from its terms 
and the means which the law afibrds for its enforcement 

A law which changes the terms of the contract, either in 
the time or mode of performance, or imposes new conditions, 
or dispenses with those expressed, or autliorizes for its satis- 
faction something different from that provided, is a law which 
impairs its obligation, for such a law relieves the parties from 
the moral duty of performing the original stipulations of the 
contract, and it prevents their legal enforcement. 

The notion that contracts for the payment of money stand 
upon any different footing in this respect from other contracts 



AFFENDDC. 448 

appears to have had its origin in certain old English cases, 
particularly that of mixed money, which were decided upon 
the force of the prerogative of the king with respect to c/iin, 
and have no weight as applied to powers possessed by con- 
gress under our constitution. The language of Mr. Chief 
Justice Marshall in Faw v. MarsteUer^ which is dted in sup- 
port of this notion, can only be made to express concurrence 
with it when detached from its context and read separated 
from the facts in reference to which it was used. 

It is obvious that the act of 1862 changes the term of con- 
tracts for the payment of money made previous to its passage, 
in every essential particular. All such contracts had reference 
to metallic coins, struck or regulated by c*ongress, and com- 
posed principally of gold and silver, which constituted the 
legal money of the country. The several coinage acts had 
fixed the weight, purity, and forms, impressions, and denomi- 
nations of these coins, and had provided that their value 
should be certified by the form and impress which they re- 
ceived at the mint. 

They had established the dollar as the money unit, and pre- 
scribed the grains of silver it should contain, and the grains 
of gold which should compose the different gold coins. Every 
dollar was therefore a piece of gold or silver certified to be of 
a specified weight and purity, by its form and impress. A 
contract to pay a specified number of dollars was then a con- 
tract to deliver the designated number of pieces of gold or 
silver of this character; and, by the laws of congress and of 
the several states the delivery of such dollars could be enforced 
by tlie holder. 

The act of 1862 changes all this; it declares that gold or 
silver dollars need not be delivered to the creditor according to 
the stipulations of the contract; that they need not be deliv- 
ered at all; that promises of the United States, with which the 
creditor has had no relations, to pay these dollars, at some un- 
certain future day, shall be received in discharge of the con- 
tracts — in other words, that the holder of such contracts shall 
take in substitution for them different contracts with another 
party, less valuable to him, and surrender the originaL 




MOKOKvtT^ APID THB PBOPLB, 



& Taking it, t!ierefore, for granted that the law plainly impain 
"Mflie obligation of euch eontracta, I proceed to in quire whether 
it iBj for that reason, enbj^it to any oonstitntioiml objection. 
In the dissenting opinion in Ilej}hurri v, Gri^woMj it is said, 
as already meutioncKl, that the tx>natitnti(jn does not forbid 
legislation impairing the obligation of eon tracts, 
^ It is tnie there ib no provision in the eonstitntion forbidding 
^^ express terms such legislation. And it is also true that 
there are express powers delegated to congress, the e^cecution 
of which nocefisarily operates to impair the obligation of con- 
tracts. It was the object of the framers of that instrnment to 
create a national goveniment competent to represent the entire 
HDoiintry in its relations with foreign nations, and to accomplish 
Boy it^ legislation meajsnres of common interest to all the people* 
"which the several states, in their independent capacities, were 
incapable of effecting, or if capable, the execution of which 
would be attended with great difBeuUy and enibarrasameDt- 
Tliey, therefore, elothed e4:>ngres& with all the powers essential 
to the successful accomplishment of these ends^ and carefully 
withheld the grant of all other powers. Some of the powers 
granted^ from their very nature* interfere in their exteutlou 
with contracts of parties. Thus war suspends intercourse and 
commerce between citizens or subjects of belligerent nations; 
it renders, during its continuance, the performance of contracts 
previously made unlawful. These incidental consequences 
were contemplated in the grant of the war power. So the regu- 
lation of commerce and the imposition of duties may so affect 
' the prices of articles imported or manufactured as to essentially 
alter the value of previous contracts respecting them; but this 
incidental consequence was seen in the grant of the power over 
commerce and duties. There can be no valid objection to laws 
passed in execution of express powers that consequences like 
these foUow incidentally from their execution. But it is oth- 
erwise when such consequences do not follow incidentally, but 
are directly enacted. 

The only express authority for any legislation affecting the 
obligation of contracts is found in the power to establish a 
uniform system of bankrnptqr, the direct object of which is to 



AFFKHDDL 4M 

release inBolyent debtors from their contracts npon the surren- 
der of their property. From this express grant in the consti- , 
tution I draw a very different conclusion from that drawn in 
the dissenting opinion in Hepburn v. Oriawold^ and in the 
opinion of the majority of the court just delivered. To my 
mind it is a strong argument that there is no general power 
in congress to interfere with contracts — that a special grant 
was regarded as essential to authorize a uniform system of bank- 
ruptcy. If such general power existed, the delegation of an 
express power in the case of bankrupts was unnecessary. As 
very justly observed by counsel, if this sovereign power could 
be taken in any case without express grant, it could be taken 
in connection with bankruptcies, which might be regarded in 
some respects as a regulation of commerce made in the interest 
of traders. 

The grant of a limited power over the subject of contracts 
mecessarily implies that the framers of the constitution did not 
intend that congress should exercise unlimited power, or any 
power less restricted. The limitation designated is the meas- 
ure of congressional power over the subject. This follows from 
the nature of the instrument as one of enumerated powers. 

The doctrine that where a power is not expressly forbidden 
it may be exercised, would change the whole character of our 
government. As I read the writings of the great commenta- 
tors, and the decisions of this court, the true doctrine is the 
exact reverse, that if a power is not in terms granted, and is 
not necessary and proper for the exercise of a power thus 
granted, it does not exist. 

The position that congress possesses some undefined power 
to do anything which it may deem expedient, as a resulting 
power from the general purposes of the government, which is 
advanced in the opinion of the majority, would of course settle 
the question under consideration without difficulty, for it would 
end all controversy by changing our government from one of 
enumerated powers to one resting in the unrestrained will of 
congress 

"The government of the United States," says Mr. Chief 
JurtiQP Marsball».speafcing for the court in Martin v. JStunter's 



446 MONOFOUEB AND THE FBOPLE. 

Zessesj " can claim no powers that are not granted to it by the 
constitution, and the powers actually granted must be snch as 
are expressly given, or given by necessary implication." This, 
implication, it is true, may follow from the grant of several 
express powers as well as from one alone, but the power im- 
plied must, in all cases, be subsidiary to the execution of the 
powers expressed. The language of the constitution respect- 
ing the writ of habeas corpus, declaring that it shall not be 
suspended unless, when in cases of rebellion or invasion, the 
public safety may require it, is cited as showing that the power 
to suspend such writ exists somewhere in the constitution; 
and the adoption of the amendments is mentioned as evidence 
that important powers were understood by the people who 
adopted the constitution to have been created by it, which are 
not enumerated, and are not included incidentally in any of 
those enumerated. 

The answer to this position is found in the nature of the 
constitution, as one of granted powers, as stated by Mr. Chief 
Justice Marshall. The inhibition upon the exercise of a speci- 
fied power does not warrant the implication that, but for such 
inhibition, the power might have been exercised. In the con- 
vention which framed the constitution a proposition to appoint 
a committee to prepare a bill of rights was unanimously re- 
jected, and has been always understood that its rejection was 
upon the ground that such a bill would contain various excep- 
tions to powers not granted, and or) this very account would 
afford a pretext for asserting more than was granted. In the 
discussions before the people, when the adoption of the consti- 
tution was pending, no objection was urged with greater effect 
than this absence of a bill of rights, and in one of the num- 
bers of \hQ Federalist^ Mr. Hamilton endeavored to combat the 
objection. After stating several reasons why such a bill was 
not necessary, he said : '' I go further and affirm that bills of 
rights, in the sense and to the extent they are contended for, 
are not only unnecessary in the proposed constitution, but 
would even be dangerous. They would contain various excep- 
tions to powers not granted, and on this very account would 
afford a colorable pretext to claim more than were j^ranted. 



APPENDIX. 447 

For why declare that things shall not be done which there is 
no power to do? Why, for instance, should it be said that the 
liberty of tlur press shall not be restrained when no power is 
given by which restrictions may be imposed? I will not con- 
tend that such a provision would confer a regulating power, 
but it is evident that it would furnish to men disposed to usurp 
a plausible pretence for claiming that power. Tliey might 
urge, with a semblance of reason, that the constitution ought 
not to be charged with the absurdity of providing against the 
abuse of an authority which was not given, and that the pro- 
vision against restraining the liberty of the press afforded a 
clear implication that a right to prescribe proper regulations 
concerning it was intended to be invested in the national gov- 
ernment. This may serve as a specimen of the numerous 
handles which would be given to the doctrine of constructive 
powers by the indulgence of an injudicious zeal for bills of 
right." 

When the amendments were presented to the states for 
adoption they were preceded by a preamble stating that the 
conventions of a number of the states had, at the time of their 
adopting the constitution, expressed a desire " in order to pre- 
vent rnisconcepticyn or abuse of its powers, that tiirther declara- 
tory and restricted clauses should be added." 

Now, will any one pretend 'that congress could have made a 
law respecting an establishment of religion or prohibiting the 
free exercise thereof, or abridging the freedom of speech, or 
the right of the people to assemble and petition the govern- 
ment for a redress of grievances, had not prohibitions upon the 
exercise of any such legislative power been embodied in an 
amendment? 

How truly did Hamilton say, that had a bill of rights been 
inserted in the constitution, it would have given a handle to 
the doctrine of constructive powers. We have this day an 
illustration in the opinion of the majority of the very claim 
of constructive power which he apprehended, and it is the first 
instance, I believe, in the history of this court, when the 
possession by congress of such constructive power has been 
asaerted. 




bf ^ legMftttoii of tba 
of Air moagHitxititm wm 

and dedued to be m tender in 



«ril kncpwti 

)aw% n^re froai time to time 
enadli aikd all piif He 
hfrpiTiiKat of debts wbs 
of tlie Y^ery terma of llie 
Of imtuliEieQl& at dtfi^Qtit 
worlliteitt, citlier ml 
bj ibe debtor io pajment of 
to take the propertr 
m^ht mdaB oa exeealioii, at an 
to iu knowo talne. 
and otbera of a like ftature, 
Am ofdtfiaiT naolla of l^palatioD doiiag the revoloti on- 
war and C^ mbentiediala period down to the formatioii of 
Th^ eatafled tbo most enormoiis e\-ila on the 



inriTTnt^^fl' ^'Pn^ 1 Tl t ^l"ta4 T 1 »i*c:«i I n, iip-^*i 



/if A-e^rti"? 



T,J .,^.Mi^ 



gacT which destroyed all private confidence and all indostiy and 
aiterprise.^' 

To prevent the recurroice of erils of this character not only 
was the claose inserted in the constitution prohibiting the 
states from issuing bills of credit and making anything bat 
gold and silver a tender in payment of debts, but also the 
more general prohibition from passing any law impairing the 
obligation of contracts. " To restore public confidence com- 
pletely," says Chief Justice -Marshall, " it was necessary not 
only to prohibit the use of particular means by which it might 
be effected, but to prohibit the use of any means by which the 
same mis<rhief might be produced. The convention appears 
to have intended to establish a great principle, that contracts 
should be inviolable." 

It would require very clear evidence, one would suppose, to 
induce a belief that with the evils resulting from what ifar- 
shall terms the system of lax legislation following the Be?ola- 



APPENDIX. 449 

tion deeply impressed on their minds, the firamers of the con- 
stitution intended to vest in the new government created by 
them this dangerous and despotic power, which they were 
unwilling should remain with the states, and thus widen the 
possible sphere of its exercise. 

When the possession of this power has been asserted in argu- 
ment (for until now it has never been asserted in any decision 
of this court), it has been in cases where a suppo*8ed public 
benefit resulted from the legislation, or where the interference 
with the obligation of the contract was very slight. When- 
ever a clear case of injustice, in the absence of such supposed 
public good, is stated, the exercise of the power by the govern- 
ment is not only denounced, but the existence of the power is 
denied. No one, indeed, is found bold enough to contend that 
if A has a contract for one hundred acres of land, or one hun- 
dred pounds of fruit, or one hundred yards of doth, congress 
can pass a law compelling him to accept one-half of the quan- 
tity in satisfaction of the contract. But congress has the same 
power to establish a standard of weights and measures as it 
has to establish a standard of value, and can from time to time 
alter such standard. It can declare that the acre shall consist 
of eighty square rods instead of one hundred and sixty, the 
pound of eight ounces instead of sixteen, and the foot of six 
inches instead of twelve; and if it could compel the acceptance 
of the same n/uniber of acres, pounds or yards, after such alter- 
ation, instead of the actual quantity stipulated, then the accept- 
ance of one-half of the quantity originally designated could 
be directly required without going through the form of alter- 
ing the standturd. No just man could be imposed upon by this 
use of words in a double sense, where the same names were 
applied to denote diflFerent quantities of the same thing, nor 
would his condemnation of the wrong committed in such case 
be withheld, because the attempt was made to conceal it by 
this jugglery of words. 

The power of congress to interfere with contracts for the pay- 
ment of money is not greater in any particular difference from 
its power with respect to contracts for lands or goods. The 
contract is not fulfilled any more in one case than in the other 
29 




he eovnpoved of the 
Btit voold a^j 

ftrttt] 

hf Am (JtliiD* of m m^sal oninber uf dfil- 
it I tttve iiev«* oiet uij mo^ wlio «imU 
§» to that aftaii^ Thft ■liwiii mhrajs htB heeat—tiiMt wooU 
W ta» fiigfaatfr ^^Hi^ to be ^lerstisd. Tct etifiireiEi^ th« 
«eepltoae» «f f^f^ pfDUnK or p«p6r doOatm* V the prtMnsMi 
<■« lie woZMl in pbee «f gold i)r sQvcr Mbr^ U eqoslh 
o&miur A de|»rtiii« finm tine tenss ^iftbe a^atniet, the mju^ 
tio Tne^ettTf \ ^' ^ ::p»iti the actual rmlne 

at the tiine of the promises in the market. Now reTerse the 
ease. Suppose congress should declare that hereafter the eagle 
should be called a dollar, or that the dollar shonid be composed 
of as manj grains of gold as the eagle, would anj body for a 
moment contend that a contract for dollars, composed as now 
of silver, should be satisfied by dollars composed of gold? I 
am confident that no judge sitting on this bench, and. indeed, 
that no judge in Christendom could be found who would sanc- 
tion the monstrous wrong by decreeing that the debtor could 
only satisfy his contract in such case by paying ten times the 
value originally stipulated. The natural sense of right which 
is implanted in every mind would revolt from such supreme 
injustice. Yet there cannot be one law for debtors and another 
law for creditors. K the contract can at one time be changed 
by congressional l^islation for the benefit of the debtor, 
it may at another time be changed for the benefit of the 
creditor 



APPENDIX. 4S1 

For acts of flagrant injustice such as those mentioned there 
is no authority in any legislative body, even though not 
restrained by any express constitutional prohibition ; for as 
there are unchangeable principles of right and morality, with- 
out which society would be impossible, and men would be but 
wild beasts preying upon each other, so there are fundamental 
principles of eternal justice, upon the existence of which all 
constitutional government is founded, and without which gov- 
emmefit would be an intolerable and hateful tyranny. There 
are acts, says Mr. Justice Chase, in Colder v. Bull^ which the 
federal and state legislatures cannot do without exceeding 
their authority. Among these he mentions a law which pun- 
ishes a citizen for an innocent action ; a law that destroys or 
impairs the lawful private contracts of citizens ; a law that 
makes a man a judge in his own cause ; and a law that takes 
the property from A and gives it to B. " It is against all 
reason and right," says the learned justice, " for a people to 
intrust a legislature with such powers, and therefore it cannot 
be presumed that they have done it. The genius, the nature, 
and the spirit of our state governments amount to a prohibi- 
tion of such acts of legislation, and the general principles of 
law and reason forbid them. The legislature may enjoin, per- 
mit, forbid and punish ; they rfiay declare new crimes, and 
establish rules of conduct for all its citizens in future cases; 
they may command what is right and prohibit what is wrong, 
but they cannot change innocence into guilt, or punish inno- 
cence as a crime, or violate the rights of an antecedent lawful 
private contract, or the right of private property. To main- 
tain that our federal or state legislatures 'possess such powers 
if they had not been expressly restrained, would, in my opinion, 
be a political heresy altogether inadmissible in our free repub- 
lican governments." 

In Ogden v. Saimders, Mr. Justice Thompson, referring to 
the provisions in the constitution forbidding the states to pass 
any bill of attainder, ex post facto law, or law impairing the 
obligation of contracts, says: "Neither provision can strictly 
be considered as introducing any new principle, but only for 
greater security and safety to incorporate into this charter 




4fi8 MOKOFOLQiS AND THE FIDOFLE. 



provisiond admitted by all to be among tlie tii^t prmeiplitf of 
govern mait. No state court would, I i>re€iime^ Eimction and 
enforce an ex poBt facto law if no iuch prulubition wag ctpn- 
tained in the constitntion of the United States; m^ neither 
would retroepective laws, taking away vested righU, l>e 
enforced. Such laws ara repugnant to those fundamentiU 
principles upon which every just system of laws is fcmnded. 
It is an elemeutary principlej adopted and sanctioned by the ' 
courts of jufltice in this country and in Great Britain, when* 
ever such laws have come under consideration ^ and yet relro- 
*Bpecti%'e 1ft WB are clearly within this prohibition/' 

In Wilkeson v. Lelund^ Mr. Justice Story, whibt c^iniDient- 
ing upon the power of the legislature of Rhode Island under 
tlie charter of Charles II, said: '*The fundamental tna.tiin£ 
of a free government seem to require that the rights of per* 
fional liberty and private propertj' should be held iNK'Jt^* At 
least no court of justice in this country would be warrant^ 
in assuming that the power to violate and difire^rd them, a 
power 60 repugnant to the common principles of justice an*! 
civil liberty, lurked under anj^ genenil grant of I^ielativr 
anthority, or ought to be implied irim\ any gii-neral exprttssitma 
of the will of the people. Tlie people ought not to be pre- 
sumed to part with rights so vital to their security and well- 
being without very strong and direct e2q)re86ion8 of such an 
intention." 

Similar views to these cited from tlie opinions of Chase, 
Thompson, Story, and Marshall, are found scattered through 
the opinions of the judges who have preceded us on this 
bench. As against their collective force the remark of Mr. 
Justice Washington, in the case of Evans v. EatoUy is without 
significance. That was made at nisi pri/iis in answer to a 
motion for a nonsuit in an action brought for an infringement 
of a patent right. The state of Pennsylvania had, in March, 
1787, which was previous to the adoption of the constitution, 
given to the plaintiff the exclusive right to make, use, and 
vend his invention for fourteen years. In January, 1808, the 
United States issued to him a patent for the invention for 
fourteen years from that date. It was contended, for the non- 



AFPENDIZ. 458 

snit, that after the expiration of the plaintiff's privilege 
granted by the state, the right to his invention became 
invested in the people of the state, by an implied contract 
with the government, and, therefore, that congress could not, 
consistently with the constitution, grant to the plaintiff an 
exclusive right to the invention. The court replied that 
neither the premises upon which the motion was founded, nor 
the conclusion, could be admitted; that it was not true that 
the grant of an exclusive privilege to an invention for a 
limited time implied a binding and irrevocable contract with 
the people that at the expiration of the period limited the 
invention should become their property; and that even if the 
premises were true, there was nothing in the constitution 
which forbade congress to pass laws violating the obligation 
of contracts. 

The motion did not merit any consideration, as the federal 
court had no power to grant a nonsuit against the will of the 
plaintiff in any case. The expression under these circum- 
stances of any reason why the court would not grant the motion, 
if it possessed the power, was aside the case, and is not, there- 
fore, entitled to any weight whatever as authority. It was 
true, however, as observed by the court, that no such contract 
with the public, as stated, was implied, and inasmuch as con- 
gress was expressly authorized by the constitution to secure 
for a limited time to inventors the exclusive right to their dis- 
coveries, it has the power in that way to impair the obligation 
of such a contract, if any had existed. And this is, perhaps, 
aU that Mr. Justice Washington meant. It is evident from 
his language in Ogden v. Saunders^ that he repudiated the 
existence of any general power in congress to destroy or impair 
vested private rights. 

What I have heretofore said respecting the power of congress 
to make the notes of the United States a legal tender in payment 
of debts contracted previous to the act of 1862, and to inter- 
fere with contracts, has had reference to debts and contracts 
between citizens. But thff same power which is asserted over 
these matters is also asserted with reference to previous debts 
owing by the government, and must equally apply to contracts 




<of gold or ah«r, certified to be 

«f a jica e ci iiftS ^m^^^ snd fmiitr br dieir form mud impreGi 
naaei i rf m i^ itrnit T^ ^esigsmko of dollars, in prerioos 
fii psii or sh«r dc41jtfs as {dainlr as if those 
vere spKs&allT naaied. 

It feilkivs.. tiicBL Ic^racaOj^ ft&m At doctrine advanced bj 
liie migiQfitT of liie ocwrt a& tt> tlie pci»ver Krf* eon^refis over ths 
sab|ea of legal tender, tiial c«tt£:Tess maj bc^row gold coin 
upon a plaice of tbe paMk- &:di to nepar gold at the maturity 
of its o^jigazioass and veiL ia dimrt disregard of its pledge^ in 
open Tiolati«i of £iidu mar oi>mpd the lender to take, in place 
of the gold stipcLlaxed. its own |]«\>Dii^es; and that legisladon 
of this chara^n* voold noi be in violation of the constitution, 
bot in harmonv vith its letter and spirit. 

The govemmoit isy at the pres^it time, seeking in the 
markets of the vorld a loan of se^end hundred millions of 
dollars in gold, upon securities contaiuing the promises of the 
United States to repaj the money, principal and interest, in 



▲FFXNDIZ. 455 

gold; yet this court, the highest tribunal of the country , this 
day declares, by its solemn decision, that should such loan be 
obtained, it is entirely competent for congress to pay it off, 
not in gold, but in notes of the United States themselves, 
payable at such time and in such manner as congress may 
itself determine, and that legislation sanctioning such gross 
breach of faith would not be repugnant to the fundamental 
law of the land. 

What is this but declaring that repudiation by the govern- 
ment of the United States of its solemn obligations would be 
constitutional? Whenever the fdlfiUment of the obligation in 
the manner stipulated is refused, and the acceptance of some- 
thing different from that stipulated is enforced against the will 
of the creditor, a breach of faith is committed; and to the 
extent of the difference of value between the thing stipulated 
and the thing which the creditor is compeUed to receive, there 
is repudiation of the original obligation. I am not willing to 
admit that the constitution, the boast and glory of our country, 
would sanction or permit any such legislation. Repudiation 
in any form, or to any extent, would be dishonor, and for the 
commission of this public crime no warrant, in my judgment, 
can ever be found in that instrument. 

Some stress has been placed in argument in support of the 
asserted power of congress over the subject of legal tender in 
the fact that congress can regulate the alloy of the coins issued 
under its authority, and has exercised its power in this respect 
without question, by diminishing in some instances, the actual 
quantity of gold or silver they contain. Congress, it is 
assumed, can thus put upon the coins issued other than their 
intrinsic value; therefore, it is argued, congress may, by its 
declaration, give a value to the notes of the United States, 
issued to be used as money, other than that which they 
actually possess. 

The assumption and the inference are both erroneous, and 
the argument thus advanced is without force, and is only 
significant of the weakness of the position which has to rest 
for its support on an assumed authority of the government to 
debase the coin of the country. 





fllB«fiS*alaot 
tf AsMwcmM 

te iwipa«th« in fiwt, and 

rf^^ -i*t f* , I mf l__t I 

IB COBMlRHiOMA dnj. 

il v«dl te a aanfed alMiM cf 

Vjr fti aBJituffiiy my Mbv 

tb» 

giii^ to tihe oouH^ b^ fiiBb fan 

miditin to Ihil- 



:toAeaniml 

ArixtnzT and pn]A%aie gorenun^itB have often ro e ortod to 
diis misefable sdi^De of robberr, which Mill designates as a 
shallow and impodoit artifiee, the ^ least covert of all modes 
oS knaTefj, which consists in calling a shilling a pound, thit 
a d^ of <H)e hundred pcmnck maj be cancelled bj ^iie pay- 
ment Gi <Hie hundred shillings '^ 

In diis country no sudi debasement has ever been attempted, 
and I fed eonfid^it that none will ever be tolerated. Hie 
dianges in the quantitr of alloT in the different coins has be^ 
made from time to time^ not with any idea of debasing them, 
but for the purpose of preserving the proper relative value 
betwe^i gold and silver. The first coinage act, passed in 1792, 
provided that the coins should consist of gold, silver and cop- 
per — the coins of cents and half-cents consisting of copper, 
land the other coins consisting of gold and silrer — and that the 
relative value of gold and silver should be as fifteen to one, that 
is, that an ounce ot gold should be taken as the equal in value 
of fifteen ounces of silver. 



AFFENDGL. 457 

In progress of time, owing to the increased production of 
silver, particularly from the mines of Mexico and South Amer- 
ica, this relative value was changed. Silver declined in 
relative value to gold until it bore the relation of one to sixteen 
instead of one to fifteen. The result was that the gold was 
bought up as soon as coined, being worth intrinsicaUy sixteen 
times the value of silver, and yet passing by law only at fifteen 
times such value, and was sent out of the country to be recoined. 
The attention of congress was called to this change in the rela- 
tive value of the two metals and the consequent disappearance 
of gold coin. This led, in 1834, to an act adjusting the rate of 
gold coin to its true relation to silver coin. 

The discovery of gold in California, some years afterwards, 
and the great production of that metal, again changed in 
another direction the relative value of the two metals. Gold 
declined, or in other words, silver was at a premium, and as 
gold coin before 1834 was brought up, so now silver coin was 
bought up, and a scarcity of small coin for change was felt in 
the community. Congress again interfered, and in 1853 
reduced the amount of silver in coins representing fractional 
parts of a dollar, but even then these coins were restricted from 
being a legal tender for sums exceeding five dollars, although 
the small silver coins of previous issue continued to be a legal 
tender for any amount. Silver pieces of the denomination of 
three cents had been previously authorized in 1851, but were 
only made a tender for sums of thirty cents and under. These 
coins did not express their actual value, and their issue was 
soon stopped, and in 1853 their value was increased to the 
standard of coins of other fractional parts of a dollar. 

The whole of this subject has been fully and satisfactorily 
explained in the very able and learned argument of the counsel 
who contended for the maintenance of the original decision of 
this court in Hepbum-v. CfrUioold. He showed by the debates 
that congress has been moved, in all its actions under tlie coin- 
age power, only by an anxious desire to ascertain the true 
relative value of the two precious metals, and to fix the coinage 
in accordance with it; and that in no case has any deviation 
from intrinsic value been permitted except in coins for frac- 



4St 



rm doilar^nA e*«B Umlthm 1 
to pvBfOttl tlmiu fiw 
, liie letittl d^fvecatlion biiBgHMdBi^lif i 
UlityiiideiMin»ieiioeL 

ItMkmM,ikom fiossteftemnlor tihei 
attaringit diflemt tuMB Hmwlkfci 
MnoBflioii of power to stnup lotil wiiik wstk ailRlmjr ^ 
md gm it emrencj , does not vert i^oii oqr tc£d : 
and tint die aigimient bnih dia«m goo Willi ft to liie ^^ 

I haye thos fiur spoken of the legal tente piwfimm with 
partieakr leferaieB to its applieation to debts eimtiMtod pre- 
Tions to its paeeaga It only leunine to nj a few weida as te 
its yaliditf iriien ap^ed to snbeeqiient tiannetioBa. 

So fiur as mibaeqnmit eontncts are made pi^nble in notea of 
die United Strtee, thete ean of eoorae be no otgeetam to dnir 
BpodSc enf<M^oenient by eompeDing a deKveity ot an eqpal 
amonnt of die notee^ or by a judgment in dami^^ finr tbeir 
yalne as estimated in gold or silFer doQsn^nor wonld tberobe 
any objeetion to andi enforcement if the legal tender ptoviaion 
bad never existed. From die general nse of the notes tiiroa|^« 
ont the country and the disappearanoe of gold and silver coin 
from circulation, it may perhaps be inferred in most ca£ee, that 
notes of the United States are intended by the parties ^sriicfe 
gold or silver dollars are not expressly designated, except in 
contracts made in the Pacific states, where the constitational 
carrencj has always continued in use. As to subsequent oon- 
tracts, the legal tender provision is not as unjust in its operation 
as when applied to past contracts, and does not impair to the 
same extent private rights. But so &r as it makes the receipt 
of the notes, in absense of any agreement of the parties, com- 
pulsory in payment of such contracts, it is, in my judgment, 
equally unconstitutional. This seems to me to follow neces- 
sarily from the duty already mentioned cast upon congress by 
the coinage power, — to create and maintain a uniform metallic 
standard of value throughout the Union. Without a standard 
of valae of some kind, commerce would be difficult, if not 
impossible, and just in proportion to the uniformity and 
stability of the standard is the security and oonseqnent extent 



AFFBDBIDIX. 459 

of commercial transactions. How is it possible for congress 
to discharge its duty by making the acceptance of paper 
promises compulsory in all fntore dealings — ^promises which 
necessarily depend for their value upon the confidence enter- 
tained by the public in their ultimate payment, and the conse- 
quent ability of the holder to convert them into gold or silver 
— promises which can never be uniform throughout the Union, 
but must have different values in different portions of the 
country; one value in New York, another at New Orleans, and 
still a different one at San Francisco. 

Speaking of paper money issued by the states, — and the 
same language is equally true of paper money issued by the 
United States — Chief Justice Marshall says, in Craig v. Ths 
State of MImovH: '^ Such a medium has been always liable to 
considerable fluctuation. Its value is continually changing ; 
and these changes, often great and sudden, expose individuals 
to immense loss, are the sources of ruinous speculations, and 
destroy all confidence between man and man. To cut up this 
mischief by the roots, a mischief which was felt by the United 
States, and which deeply affected the intere^ t and prosperity 
of all, the people declared in their constitution that no state 
should emit bills of credit." 

Mr. Justice Washington, after referring, in Ogden v. StMjm- 
der$^ to the provision of the constitution declaring that no state 
shall coin money, emit bills of credit, make anything but gold 
and silver coin a tender in payment of debts, says: ^ These 
prohibitions, associated with the powers granted to congress ' to 
coin money and to regulate the value thereof, and of foreign 
coin,' most obviously constitute members of the same family, 
being upon the same subject and governed by the same policy. 
This policy was to provide a fixed and uniform standard of 
value throughout the United States, by which the commercial 
and other dealings between the citizens thereof, or between 
them and foreigners, as well as the moneyed transactions of 
the government should be regulated. For it might well be 
asked, Why vest in congress the power to establish a uniform 
standard of value by the means pointed out, if the states might 
use the same means, and thus defeat the uniformity of the 



460 MOWOPOUES AMD TUB FW>Ptl. 

standard, and consequently the standard itself? And why 
establish a Btandard at all for the government of the varione 
contracts which niight he entered into, if those contracte might 
afterwards be discharged by a different etandard, or by that 
which is not money, under the authority of state tender laws I 
It is obvious, therefore J that these prohibitione in the tenth 
section are entirely horaogeneoaSj and are essential to the 
establishment of a uniform standard of value in the formation 
and discharge of contracts,*' 

It is plain that this policy cannot be carried out, and this 
fixed and uniform metallic standard of value throughout the 
United States be maintained^ so long m any other standard is 
adopted, which of itself has no intrinsic value and is forever 
fluctuating and uncertain. 

For the reasons which I have endeavored to unfold, I am 
compelled to dissent from the judgment of the majority of the 
court* I know that the measure, the validity of which I ha\*e 
called in question, was passed in the midst of a gigantic rebeh 
lion, when even the bravest hearts sometimes doubted the 
fiafety of the republic, and that the patio tic men who ml opted 
it did BO under the conviction that it would increase the ability 
of the government to obtain funda and supplies, and thus 
advance the national cause. W^ra I tx>^ be governed by my 
appreciation of the character of those meii^ instead of my 
views of the requirements of the constitiition, I should readily 
assent to the views of the raajprity of the court Bnt, sitting 
as a judicial oflScer, and bound to compare every law enacted 
by congress with the greater law enaoted by the people, and 
being unable to reconcile the mea«ire in question with that 
fundamental law, I cannot besiti^ to pronounce it as being, 
in my judgment, unconstitutional and void^ 

In the discussions which have attended this subject of legal 
tender there has been at times what seemed to me to be a 
covert intimation, that opposition to the measure in question 
was the expression of a spirit not altogether favorable to the 
cause, in the interest of whidi thiat meaaure was adopted. All 
such intimations I repel with alL the energy I can express. I 
do not yield to any one in honoring and revcraiciiig ^e noUe 



I 



APPENDIX. 461 

and patriotic men who were in the conncilB of the nation 
during the terrible etruggle with the rebellion. To them 
belong the grcHtest of all glories in our history, — ^that of hav- 
ing saved the Union, and that of having emancipated a race. 
For these results they will be remembered and honored so 
long as the EngUsh language is spoken or read ainong men. 
But I do not admit that a blind approval of every measure 
which they may have thought essential to put down the rebel- 
lion is any evidence of loyalty to the country. The only loyalty 
which I can admit consists in obedience to the constitution 
and laws made in pursuance of it It is only by obedience 
that affection and reverence can be shown to a superior having 
a right to command. So thought our great Master when he said 
to his disciples: ^ If ye love me, keep my commandments." 



CHAPTER Y- 

'OOTSEKMSfrr ODDTTBOL OF KAILBOAVB. 

SINCE concluding what we desired to say on the enhject of 
controlling and regulatiag railroads and railroad eorpo ra- 
tions, our attention has been directed to a circular from The 
Jf^mD York Nation, of Jnlj 27thj 1873, entitled: ^^Tlie Rait- 
Toad Discussion, and Common Sense." This singular article 
challenges attention. If it is put forth in the interest of rail- 
ix>ad corporations, we can readily account for the views ex- 
pressed, and the covert fore&hadowing of national control of 
mlroads; but if it >>e published and circulated in the interest 
of the peo]>le as Tli^ Naiion would have us understai d, it 
is not calculated to ast^ist them in their efforts at reform , bnt 
on the contrary will tend to divide and distract their counsels, 
and delay the relief sought. 

We copy the circolar, that the reader may jndgo of its 
merits, and to give a more intelligent nnderBtanding of onr 
remarks upon it: 

THE KAILBOAD DISCUSSION AND COMMON 8KN8K — THE LATEST DXVIGB 

FOB FIXING BATES OF TBANSPOBTATION. 

m 
(From the Nation [N. Y.] of Jnlj 17.) 

We have followed, and shall continue to follow, the " &rm* 
ers' movement with great interest, but it must be confeBsed 
that it seems at times of no little difficulty, owing to the very 
heterogenous composition of the organizations which are car- 
rying it on, and the wide diversity of their character and 
avowed aims. When Judge Lawrence was turned out of ofSce 
in Illinois by the " Grangers," and Judge Craig put in his 
place, we took it for granted that they were going to deliver 
themselves from the tyranny of the railroads by putting judges 
on the bench pledged to interpret the state oonstitntion in a 

(4SS) 



^ 



AFPENDEC. 4SS 

particular way, or in other words, as one of the local papers 
pnt it, by showing that "the people" were superior to both 
laws and judges. It has, however, since been stoutly denied 
that this interference with the bench was anything more than 
a local accident, and we have been assured that the fEurmers 
seek changes of a much more legitimate character, and resting 
on more solid foundations than the creation of a subservient 
judiciary. The recent platforms have recently had a much 
wider sweep than the earlier ones, and, unless language has 
been gravely abused in making them, embrace grave modifica- 
tions in fiscal as well as in railroad legislation. But the ques- 
tion how to reduce the railroads to the condition of public 
highways, controllable by and existing solely or mainly for the 
convenience of the community, is still apparently as far from 
solution as ever. It is by no pieans surprising that this 
should be the case, but that it is the case we are forced to con- 
clude by the extraordinary character of the latest plan pro- 
pounded by the reformers, which has had suflScient plausibility 
to command the approval of so sober-minded a paper as the 
Chicago Tribune. 

The farmers have been accused, partly in consequence of 
their escapade about the judges in Illinois, of seeking to rob 
the railroad companies of their lawful earnings by forcing 
them to carry on their business at a loss, under the operation 
of cast-iron rules, drawn up without reference to its peculiar 
nature. This was a charge of which the fanners soon began to 
see the gravity, and they accordingly now announce that they 
have no scheme of spoliation or confiscation in their minds, 
but that they have at last hit upon a mode of ascertaining 
what are " reasonable rates," which consists in discovering 
what was the amount of capital " actually invested in con- 
structing and operating the roads," and treating a fair per- 
centage of this as a proper return to the stockholders, and all 
charges which bring in more than this as " unreasonable," and 
therefore open to prohibition by the courts and state legisla- 
tures. Under this theory of railroad property, all stock whiek 
does not represent money actually invested is treated as " fictU 
tious," and all attempts to earn dividends on such stock as 




ifti MOKOFOLtES AKD TH^ PEOPLE, 



attampte at extortion. For instance — to pot a ca^e of fi^uetit 
occurrence — a corporation obtains a charter for a road wJiicli 
will cost two million dollars to build. It accordingly borrows 
the two millions on raortga^ bond By and coofi tracts the road, 
while the inembcirB divide among tliemselves two miUions of 
atock more, and they work the road &o as to make it paj 
interest on the four mi]lion&. The farmers now saj that an 
road shall be so worked as to pay interest on anything but the 
proceeds of the bonds, or, in other words, the actnal cost of 
construction and equipment This, stripped of de tails, ia the 
new plan, as gravely propounded by the Vkieugo Tribune. 

Kow, if anybody will get up and propose a general railroad 
act of this nature, applicable to all roads here-at\er to be bnilt^ 
we tUitik we can promise that he will have the hearty support 
of everybody who has serionsly reflected ou the railroad 
problem. Forbid the construction of any road except wilh 
the proceeds of paid-up stock* and forbid any higher dindendi 
than a certain fixed percentage on this amount^ and we shall 
have a rule of which nobody can complain. We do not 
believe that a single mile of railroad would ever be eon- 
gtructed under such a rule in a new and thinly settled country 
like the west or south. Safe investments are not so scaroe as 
to induce people to go into one of the most unsafe of invest- 
ments, and one promising in most cases no return at all for 
several years, for the mere chance of seven or even ten per 
cent, at the outside. But we should, nevertheless, be heartily 
glad to see the plan tried, and believe it would, by stopping 
railroad construction for the present, bring the weatem farmers 
to a healthier comprehension of their relations to the roads, 
and railroad companies to a healthier comprehension of their 
relations to the community, and might tend to a solution 
of the railroad problem which would be both permanent and 
satisfactory. 

But the application of any such rule now to roads already 
in operation would be spoliation pure and simple — spoliatioD 
as flagrant as any ever proposed by Karl Marx or Ben. Butler; 
if any attempt were made to carry it out, it would produce 
perhaps the greatest financial crash ever witnessed. It has, in 



▲PFENDEC. 465 

the first place, that leading characteristic of Ben. Butler's 
greenback scheme, that it would not only violate a tacit pledge 
made by the state to individuals, but it would deprive men of 
rewards already earned by running great risks. When a rail- 
road constructed for two million dollars is made to earn interest 
on four millions, the case is precisely similar to that of a gov- 
ernment which, in a time of great danger and perplexity, sells 
seven per cent bonds at fifty; and the present proposal of the 
fitfmers resembles Butler's plan of paying the bondholders in 
1870, what they gave for their bonds in 1862. In fact, it is 
the old-fashioned game on a great scale of '^ Heads I win, tails 
you lose." The west has, during the past thirty years, wanted 
railroads, which there was a very smaU chance of making 
profitable for a long time. It encouraged eastern men and 
foreigners to make them in any way they pleased, running 
whatever risk there was, and pocketing whatever gain there 
might be, and they were made. The investment then was one 
of great danger and difficulty; to treat it now as one of no 
da/nger and no difficulty would he ai/mply swindling. The 
word is hard, but the times demand plain speech. This was 
perhaps a bad mode of securing lines of communication, but 
the laws allowed it and encouraged it, and the people 
applauded it, and it is now a contract as binding in morals as 
in law. It is open to us to turn over a new leaf, and permit 
no more roads to be made in that way, but it is not open to us 
to treat those who lent us their money as dupes. As there has 
been enough of this sharp practice already, more of it would 
seriously shake the foundations of social order. 

In the second place, as regards the older roads, it is not 
possible for '^ the people " or anybody else to ascertain what is 
the exact amount on which, in abstract justice, the earnings 
ought to pay interest The stock, whether "fictitious" or 
not, has in most cases passed out of the hands of the original 
holders. It has been sold and resold, in open market, under 
the most solemn guarantees known to civilized society, with 
the understanding that it represented the honajide ownership 
of the roads, with all their earnings, possible as well as actual. 
The laws, the courts, and public opinion, assured to it this 
80 



f j um etar irithont jmamtiKm or q in i Tififgti oii, Lidiis« 
it liM puMed into die liandt of widows, orphans, aoid Im^Iw 
paopis gBomUjf of eharitsble ecnrporationsy of c(dlege% Imki, 
iHd iiistitatibns ai all kinds hy whidb the albin of Aeeoni* 
mvnit^ aie administered. To Aiow bbj doubt on ita Tahe 
niw, would be to cause an amount af miseiy and alann wbksh 
no tUnking man couM contemplate without a diudder. Hthe 
ilite wants to make die railroads common highways, ft has the 
li|^t to take them, but at their market value, paying Ike 
owneiB what other people would pay them, and not inquiring 
eurioudy and knavishly into the original cost Between honeit 
parties to a baigain, that| to use a homely phase, is ^NeidMr 
here or there." The people ought, undoubtedfy, to have lodnd 
f^rwardalittlewhen ihqr first began to grant cjiarters; bvtnot 
haying done so, they ought noi'to now throw on oliistB Ae 
whole damage done by their own laches. 

Thou^ last, not least, much of the outcry over the h^ 
rates diarged by raOro^ is due to an imm^ise but dee^ 
seated popular ddusion as to the value of railroad {mqpertj. 
When one puts his newspaper aside, and site down calmly te 
examine the reoeipte which the farmers are so anxious to have 
cat down, the proposal we are discussing assumes a somewhat 
ludicrous aspect. We have before us the last issue of Poor^B 
Railroad Manual^ which certainly ought to be perfectly 
studied before the minds of the public are filled with wild and 
revolutionary notions about railroad property. There were in 
operation last year, in the United States, 57,323 miles of rail- 
road, the net earnings of which bore to the cost of the I'oads 
the relation of 5.20 per cent., and to the capital stock of 3.21. 
This means simply that the work of transportation in the 
United States is, on the average, already done at a loss to the 
owners of the lines, or, in other words, vastly more cheaply to 
the public than there is the least likelihood of its being done 
in any other way — a